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SMM Lead Market Morning Review

Release time:2014-11-20

 Nov 20, 2014 01:34 GMT   Source:SMM

 

SHANGHAI, Nov. 20 (SMM) – LME lead closed up USD 6/mt at USD 2,029/mt on Wednesday. Trading volumes for three-month lead on the London Metal Exchange added 10 lots to 2,338 lots, but positions tumbled 4,614 lots to 112,426 lots. At the same time, LME lead inventories expanded 425 mt to 217,125 mt.

The minutes from the US Federal Reserve’s October FOMC meeting showed that policymakers are concerned about outlooks for lower inflation and see limited impact from a renewed global slowdown on the US economy. Market participants expect the Fed to delay an interest rate hike in light of its stance on inflation. US housing starts surprised the market by falling 2.8% MoM in October, missing expectations and September’s reading. Building permits, in contrast, surged to the highest since June 2008. The nation’s housing market index rose to 58 in November, higher than estimates and October’s reading, in a sign of high sentiment among US real estate developers. As such, the US property market is expected to improve appreciably, which should bode well for its economy as a whole.

Chinese Premier Li Keqiang put forward a series of measures to reduce financing difficulties at the recent executive meeting of the State Council. The government is likely to make pledged supplementary lending (PSL) available to all commercial banks in 2015 in a bid to lower financing costs. However, it was reported that the People’s Bank of China (PBOC) is reluctant to lower interest rates. Meanwhile, renewed reports of copper procurement by the State Reserve Bureau will boost sentiment in the base metals markets.

US equities initially rose, but later closed lower on Wednesday. The US dollar index edged up, but goldfell as much as 1.8% before leveling out. LME base metals climbed across the board.

PMIs from China, Europe and the US are expected to be released on Thursday. LME lead is set to hover at USD 2,020-2,040/mt, and the most active SHFE 1501 lead contract is forecast to fluctuate at RMB 13,510-13,570/mt. Traded prices on China’s physical lead markets should range between RMB 13,450-13,600/mt on Thursday.