SHANGHAI, Aug. 28 (SMM) – LME lead prices overnight advanced to USD 2,263.75/mt after starting at USD 2,248/mt, and closed up USD 13.5/mt, or 0.6%, at USD 2,262.75/mt. Trading volumes lost 269 lots to 2,718 lots, and positions gained 677 lots to 131,687 lots. LME lead inventories shed 50 mt to 217,150 mt.
Lead for October delivery, the most active contract on the Shanghai Futures Exchange, climbed to RMB 14,615/mt after opening Wednesday’s night session at RMB 14,560/mt, and finished down RMB 5/mt at RMB 14,580/mt. During the night session, trading volumes for the SHFE 1410 lead contract totaled 4,362 lots, while positions added 62 lots to 27,378 lots.
The GFK consumer confidence index, published on August 27, dropped unexpectedly in July to 8.6, registering the biggest fall in more than three years and down for the first time in one and a half years. Consumers in Germany are increasingly concerned that sanctions against Russia and other conflicts across the globe could place the German economy in jeopardy.
European Central Bank Chief Mario Draghi stated last Friday in Jackson Hole that the ECB is set to unveil more economic stimulus measures, raising expectations for quantitative easing (QE) in the euro zone. Meanwhile, the ECB hired BlackRock, the world’s biggest money manager, to advise on developing a program to buy asset-backed securities, which should help increase liquidity in financial markets.
No written agreement was reached on Wednesday at the meeting between Russian President Vladimir Putin and his Ukrainian counterpart Petro Poroshenko. Ukrainian military spokesman claimed on Wednesday that more Russian soldiers had crossed into Ukraine to launch an attack on government forces with pro-Russian separatists. The intensifying geopolitical strains in Ukraine left investors even more cautious.
The People’s Bank of China (PBOC) reported that it recently granted a RMB 20 billion re-lending quota to some regional bank branches to support agriculture. The PBOC also emphasized that it will lower interest rates for qualified rural financial institutions by one percentage points from favorable rates. This is expected to give a boost to China’s stock markets and base metals prices.
The US dollar index fell 0.24%, while the euro rose 0.19% against the greenback. Major world shares closed fractionally higher. LME base metals dropped slightly, except for a rise in lead and zinc.
With the dearth of news expected on Thursday, LME lead prices are set to hover between USD 2,250-2,280/mt, and the most active SHFE 1410 lead contract is expected to move between RMB 14,550-14,650/mt. In China’s physical lead markets, traded prices should be in a RMB 14,300-14,450/mt band on Thursday.