SHANGHAI, Sep 27 (SMM) - This week’s focus include the US monthly rate of durable goods orders in August, the Conference Board’s US Consumer Confidence Index in September, the final value of the University of Michigan US Consumer Confidence Index in September, China’s official September manufacturing industry PMI, and Caixin Manufacturing Industry PMI for September, which are expected to be positive.
The market will also pay attention to the statements made by the European Central Bank President, the Fed Chairman, the US Treasury Secretary and other officials about the measures relative to the economy and COVID-19 pandemic. LME lead fell sharply to hit a nearly 5-month low early last week, and the LME cash-to-three-month backwardation shifted to the contango. LME lead is likely to stop falling and stabilise as the lead stocks across LME-listed warehouses declined slightly, and the Fed was thinking about interest rate hike. LME lead is expected to stand between $2,110-2,165/mt this week.
There is only 4 working days this week due to the National Day holiday, and is key for the pre-holiday restocking. The supply of lead ingot was limited due to the intensified power rationing, which dragged down the expectations of the inventory increase of lead ingots. The demand of the lead ingots was also affected by the production curtailment, so the restocking level is expected to decline before the holiday. The most traded SHFE 2110 lead hit a nearly 15-month low last week before stabilising at around 14,000 yuan/mt, and traded below the moving averages. The most traded SHFE lead contract may shift to the 2111 contract with the transfer of positions this week, and the prices are expected to stand between 14,150-14,550 yuan/mt.
The spot prices are expected to move between 14,250-14,450 yuan/mt this week. The production of primary and secondary lead in many regions will be affected by the power rationing this week, and the secondary lead smelters in the regions without power rationing have also reduced or suspended production due to wider losses. The lead ingot supply are expected to decline further. The primary lead and secondary lead smelters are likely to deliver goods at premiums. The secondary lead prices will remain higher than the primary lead prices in some regions. Holders actively shipped goods before the National Day Holiday, and some quotations stood at discounts. The downstream users are expected to restock raw materials before the holiday this week, but the restocking amount may decrease due to the production curtailment amid the power rationing in Jiangsu and other regions.