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SMM Lead Market Morning Review (2014-10-27)
Oct 27,2014 09:58CST
price review forecast
Source:SMM
LME lead is set to hover between USD 1,980-2,000/mt, and the most active SHFE 1412 lead contract is forecast to move between RMB 13,570-13,670/mt.

SHANGHAI, Oct. 27 (SMM) – LME lead fell as low as USD 1,991/mt after starting last Friday at USD 2,028/mt against a rash of negative macroeconomic news, and ended down USD 28.75/mt, or 1.42%, at USD 1,992/mt. Trading volumes gained 179 lots to 2,298 lots, but positions shed 252 lots to 117,293 lots. At the same time, LME lead inventories held flat at 224,675 mt.

Lead for December delivery on the Shanghai Futures Exchange, the most active contract, opened last Friday’s night session at RMB 13,655/mt, and then retreated to finish down RMB 35/mt, or 0.26% at RMB 13,620/mt. During the night session, trading volumes for the SHFE 1412 lead contract totaled 232 lots, while positions added 26 lots to 9,104 lots.

The National Bureau of Statistics reported last Friday that the prices of new houses fell YoY in 58 middle and large Chinese cities, remained flat in 2, and rose in only 10 in September. Home prices in Hangzhou, Zhejiang Province posted the biggest fall in September, down 7.9% YoY. Second-hand house prices dropped YoY in 52 cities, with prices in Wenzhou registering the sharpest decline of 10.4%. China’s depressed property market that has been slipping since the start of the year put a dent in market sentiment.

It was reported that the Shanghai-Hong Kong Stock Connect has been shelved indefinitely due to the ongoing Occupy Central movement, which has brought Hong Kong’s financial district to a standstill in recent weeks. Meanwhile, the Shanghai Stock Exchange canceled dress rehearsal for the Shanghai-Hong Kong Stock Connect scheduled on Monday.

Twenty-five euro zone banks failed a stress test led by the European Central Bank (ECB), but none of Europe’s largest banks, including Deutsche Bank, were found lacking capital. The stress test showed that total gap of 25 billion euros was indentified at these 25 banks as of the end of 2013, most of which has now been raised by banks.

US new home sales were reported at an annualized 467,000 in September, shy of the expected 470,000, but above August’s reading of 466,000. UK GDP grew 3.0% in the September quarter, dovetailing with forecasts, but short of a 3.2% rise in Q2.

The US dollar index edged down 0.17%, but the euro rose 0.19% against the greenback. US stocks stretched gains, while European stocks were mixed. LME copper and tin closed higher, but other base metals fell.

Base metals markets are expected to be pressured by a series of downbeat macroeconomic news on Monday. LME lead is set to hover between USD 1,980-2,000/mt, and the most active SHFE 1412 lead contract is forecast to move between RMB 13,570-13,670/mt. Traded prices on China’s physical lead markets should range between RMB 13,600-13,700/mt on Monday.

 

LME lead prices
SHFE lead prices
spot lead prices

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