Lead supply deficit narrowed to 8 000 t in the first four months of 2008,

MCX Lead June traded negative following Lme movement, closed near 77.15 with minor gains, days low registered near 75.40 and day high registered at 78.50

Traders in China said some lead smelters in Yunnan province have cut production because of the drop in lead prices.

Lead refineries in the region of Shadian, which have an estimated annual output of 300,000-350,000 tons, have reduced production levels by about 40%, they said. The refineries process lead bullion into ingots, but the decline in prices to below $2,000/ton has wiped out their margins as they had bought the bullion when prices were much higher, said a Shanghai-based lead trader.

The lead supply deficit narrowed to 8 000 t in the first four months of 2008, compared a difference of 20 000 t in the same period of 2007, according to the ILZSG's preliminary data. Global lead mine production rose 5,9% year-on-year, to 1,2-million tons, mainly because of increased production in Bolivia and China.

World refined lead metal output was 1.,% higher, thanks to rises in Australia, Canada, China, India, Kazakhstan, and the Russian Federation. Germany and the Republic of Korea reported production declines.

World demand for refined lead metal nudged upwards by 0,7%, as increases in demand from Brazil, China, Italy, Japan and the Russian Federation marginally exceeded reductions in the Czech Republic, Germany, the Republic of Korea and Taiwan.

China’s net exports of refined lead metal during January to April 2008 amounted to 21 000 t, compared with 75 000 t over the same period in 2007.

Lead inventories at LME, increased by 4025 MT to 83325 MT.


MCX Lead June -Technical outlook:

The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.
Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 75.5 levels. If broken can see further fall to 73.9 and 72.4, If market holds above 77.0 further rally can be seen towards 78.6 and 80.1



Recommendations –MCX Lead June: Sell at 78 Target 76.5 and 75 SL 79.20


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