LME Lead Prices Set for Rise Next Week amid Weak Dollar

SHANGHAI, Aug. 28 (SMM) – LME lead is expected to grow to $1,650-1,720 per tonne next week, SMM lead group predicts.

On the macro side, US dollar is predicted to lose rising momentum as possibility of US Fed’s interest rate hike in September reduces. Chinese yuan will stay stable or even appreciate due to Beijing’s parade on September 3, depressing US dollar again. This will boost lead prices.

SHFE 1510 lead should rise modestly to 13,250-13,550 yuan per tonne next week. Technical indicators signal a growth. This week, expectation for yuan depreciation supported SHFE lead prices. But Beijing’s parade will help yuan to stabilize or appreciate and high SMM/LME lead price ratio leaves downside room open. As such, any sharp rise in SHFE lead will be difficult.

Chinese spot lead is predicted to increase to 13,400-13,600 yuan per tonne next week. Henan-based lead smelters will ship fewer goods out due to influence of the parade.Traders will buy more spot lead and sell lead futures when the latter post large rises as they expect lead futures will slump following big rises but spot prices will only drop slightly.Downstream buyers will still purchase under term contracts early September. Those factors combine to support lead prices.

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