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SMM Lead Market Morning Review (2014-12-10)

Release time:2014-12-11

Dec 10, 2014 01:53 GMT   Source:SMM

 

 

SHANGHAI, Dec. 10 (SMM) – LME lead started Tuesday at USD 2,030.3/mt and then held at USD 2,030-2,035/mt in the Asian trading session. During European and US trading hours, the price of the soft metal closed down USD 11.5/mt at USD 2,022.3/mt against downbeat macroeconomic news. Trading volumes for three-month lead on the London Metal Exchange added 1,369 lots to 3,828 lots, and positions shed 99 lots to 118,560 lots. LME lead inventories shrank 2,200 mt to 222,275 mt.

Lead for January delivery on the Shanghai Futures Exchange, the most active contract, dipped to RMB 13,330/mt in Tuesday’s night session after opening at RMB 13,345/mt. The price of the SHFE 1501 lead contract rebounded to as high as RMB 13,360/mt subsequently and finished up RMB 15/mt at RMB 13,360/mt. Trading volumes for the most active contract were only 50 lots in the night session.

Greece’s Prime Minister Antonis Samaras surprised markets on Tuesday by announcing a snap presidential election. If he fails to win sufficient support for his candidate, an early general election could follow which investors fear will bring to power the radical left Syriza party. Such an outcome would reignite fears about Greece’s place within Europe’s monetary union. In the wake of the news, Greece’s stocks tumbled, which had a contagion effect on stocks across the Europe and increased risk aversion.

Germany’s exports fell a seasonally adjusted 0.5% MoM in October, beating a 1.7% contraction expected, while imports disappointed markets by sliding 3.1% MoM. Despite the slight improvement in exports, the nation’s imports remained dispiriting in a sign of sluggish demand in Germany and strong downward economic pressure.

Against a backdrop of a slowdown in China’s GDP growth, markets expect the Chinese government to unveil more stimulus measures at the Central Economic Work Conference (Dec. 10-13).

The US Jobs Openings and Labor Turnover Survey (JOLTS) showed that the number of job openings for October hit 4.83 million, the second highest since January 2001 and exceeding the estimated 4.795 million. Some 2.72 million Americans quit their jobs in October, down from September. The fall in the quits rate suggests that workers have lower confidence in the labor market and are concerned over US economic outlook.

Union leader Jorge Juarez said that workers at Peru’s biggest copper and zinc mine, Antamina, will start a new round of indefinite strike on Wednesday, which is expected to help underpin copper prices.

The US dollar index slipped 0.47% on Tuesday, while the euro advanced 0.5% against the greenback. US equities were mixed, and European equities fell across the board. LME lead and nickel closed lower, but other base metals rose.

Base metals markets are now dominated by caution amid a slump in the Shanghai Composite Index and an earlier-than-expected presidential election in Greece. China is slated to release it CPI and PPI on Wednesday which should boost expectations for the government to adopt more stimulus. This, however, will not boost lead prices significantly.

LME lead is set to hover at USD 2,010-2,040/mt, and the most active SHFE 1501 lead contract is expected to move at RMB 13,320-13,420/mt. Traded prices on China’s spot lead markets should range between RMB 13,350-13,450/mt on Wednesday.