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SMM Lead Market Morning Review (2014-12-9)

Release time:2014-12-09

Dec 09, 2014 01:47 GMT   Source:SMM

 

 

SHANGHAI, Dec. 9 (SMM) – LME lead started Monday at USD 2,032/mt and hovered narrowly at USD 2,020-2,038/mt in the Asian trading session. During European and US trading hours, the price of the soft metal closed up USD 3.8/mt at USD 2,033.8/mt. Trading volumes for three-month lead on the London Metal Exchange shed 605 lots to 2,459 lots, while positions decreased 526 lots to 118,659 lots. LME lead inventories shrank 2,300 mt to 224,475 mt.

Lead for January delivery on the Shanghai Futures Exchange, the most active contract, opened at RMB 13,320/mt in Monday’s night session and soared to RMB 13,370/mt afterwards before ending down RMB 25/mt at RMB 13,400/mt.

China’s exports totaled USD 211.66 billion in November, up 4.7% YoY, well below an 8% rise expected, while imports fell 6.7%YoY, as against the estimated 3.8% increase. Trade surplus expanded 61.4% YoY to a record high of USD 54.47 billion in November. These foreign trade numbers pointed to considerable downward economic pressure in China and anemic domestic demand, putting a lid on base metals prices. 

The US Federal Reserve’s labor market conditions index (LMCI) slipped sharply to 2.9 in November, missing the 4.0 expected. The index for October was revised down to 3.9, compared with the initial estimate of 4.0.

After being seasonally adjusted, Germany’s industrial output for October fell short of expectations and September’s reading. “Industrial production has stabilized,” the nation’s Economy Ministry said. “After the weakness in the summer six months, a trough may have been reached in manufacturing as well as in construction.”

Ewald Nowotny, a member of the ECB’s Governing Council stated Monday that the ECB is considering buying sovereign bonds and will decide what measures it will take in Q1 2015 to stimulate the economy. This comment boosted market expectations for the ECB to launch quantitative easing.

The US dollar index inched down 0.26% on Monday. Crude oil prices tumbled over 4%. Stocks in China continued to rally, whereas other major world stocks fell. LME lead and tin rose, but other base metals closed with losses.

Base metals prices are expected to take heart from China’s Central Economic Work Conference to be held on Tuesday. LME lead is set to move at USD 2,020-2,050/mt, while the most active SHFE 1501 lead contract is forecast to fluctuate at RMB 13,280-13,380/mt. Traded prices on China’s spot lead markets should range between USD 13,350-13,450/mt on Tuesday.