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April 2017 | Base Metals


Lead: More vulnerable


There are many headwinds in lead at the moment. Mine restarts are nearing and it will be a slower year for auto sales. But LME stocks are falling from a low level, spreads are tighter, sellers are reluctant to chase the market and the glut of scrap created by the Q4 2016 price rally is getting worked through. These factors have helped to keep prices volatile, but range-bound. However, lead is starting to look more vulnerable to more of a pull-back now. Dips should be well supported.

Still trading sideways, for now Lead prices are looking weaker again as they drift lower through various support levels. So far the lows from mid-March are holding though, which continues to suggest dip buying interest. As such, the overall trend still seems to be sideways in the $2,190-2,400/tonne range and the market feels balanced. Emerging stock downtrend worth watching That said, LME stocks are now falling at a steady pace again, with no inflows since March 21, while outflows have averaged 2,300 tpd since March 29. This rate compares with 311 tpd in March, 103 tpd in February and 500 tpd in January. With cancelled warrants at 93,950 tonnes, it means available metal in LME sheds stands at 77,800 tonnes, which is not that high considering...

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