SHANGHAI, Oct. 9 (SMM) – LME lead started Wednesday at USD 2,092/mt, and then steadied around USD 2,090/mt in the Asian trading session. During European and US trading hours, the price of the soft metal dipped to as low as USD 2,072.5/mt, and finished down USD 17.8/mt at USD 2,077/mt. Trading volumes shed 1,107 lots to 3,206 lots, but positions gained 324 lots to 124,478 lots. LME lead inventories remained unchanged at 225,225 mt.
Lead for November delivery on the Shanghai Futures Exchange, the most active contract, opened at RMB 13,910/mt during Wednesday’s night session, and then tracked LME lead down to RMB 13,825/mt. The price of the most active contract later recovered slightly due to some buying, and closed down RMB 25/mt at RMB 13,845/mt. Trading volumes for the contract slumped to 272 lots, but positions added 38 lots to 15,182 lots.
With no major economic indicators released on Wednesday, markets were focused on the US Federal Reserve’s minutes of September’s policy meeting. There was still no concrete timing about an interest rate hike in the minutes. Some policymakers held that the present forward guidance is appropriate in terms of risk management. The Fed indicated that it would need more signs of recovery in the US economy before raising interest rates. As a result, the US dollar index fell precipitously, giving a boost to base metals prices.
HSBC’s China service PMI published on Wednesday dropped to 53.5 in September, down from a 17-month high of 54.1 in August, but remained high, a sign of continued expansion. Meanwhile, China’s 1-year interest-rate swaps slid to a refreshed 17-month low, suggesting that markets are expecting the People’s Bank of China (PBOC) to sustain accommodative monetary policy.
The US dollar index fell 0.42%, while the euro rose 0.52% against the greenback. US stocks advanced sharply, but European shares dropped across the board. LME base metals all closed lower
On Thursday, base metals markets should continue digesting the US Fed’s dovish minutes and expectations for a broad interest rate cut in China. LME lead is expected to move between USD 2,075-2,095/mt, and the most active SHFE 1411 lead contract is set to hover between RMB 13,800-13,900/mt. On China’s physical lead markets, traded prices should range between RMB 13,700-13,800/mt on Thursday.