SHANGHAI, Oct. 8 (SMM) – LME lead hovered essentially between USD 2,075-2,105/mt during the Chinese National Day holiday amid mixed economic indicators.
Germany’s seasonally adjusted industrial output slumped 4% MoM in August, recording the biggest monthly fall in five and a half years. This, combined with the nation’s disappointing manufacturing orders released on Monday, stoked concerns over the largest economy in the euro zone. The International Monetary Fund (IMF) lowered its forecast for the global economic growth for 2014 by 0.1 percentage point to 3.3%. In response, the US dollar index and European and US stocks tumbled.
The People’s Bank of China (PBOC) and the Chinese Banking Regulatory Commission (CBRC) announced September 30 to improve financial support for low-income housing construction to boost the property market. This was interpreted as a sign of loosening mortgage. Meanwhile, the State Council reported October 4 that it allows local governments to issue debts on their own. The PBOC held its monetary policy unchanged at the 3rd routine meeting on October 5. It is worth noting that the Hong Kong government and students on the street agreed to talk this Friday.
European and US stocks dropped significantly. LME base metals were mixed, with aluminum, zinc, and nickel posting strong showing.
HSBC’s China service and composite PMIs for September are due for release on Wednesday. Market sentiment will be boosted by reports that the PBOC will ease mortgage, proffering certain support to base metals prices.
LME lead is expected to fluctuate between USD 2,080-2,100/mt on Wednesday, and the most active SHFE 1411 lead contract is set to level off to the RMB 13,780-13,880/mt range. In China’s physical lead markets, traded prices should hold steady between RMB 13,700-13,800/mt.