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The slightly bullish performance follows the release of better-than-expected data from China – see data section below – which helped to mitigate some of the bearishness surrounding the market due to ongoing trade tensions between China and the United States.
Lead prices outperformed with the metal’s most traded October contract climbing to 18,795 yuan ($2,755) per tonne as at 11.27am Shanghai time, up by 110 yuan per tonne from Thursday’s close.
The heavy metal continues to benefit from a positive fundamental backdrop.
SHFE lead stocks totaled 18,277 tonnes on August 24, down 56.3% from 41,816 tonnes at the start of the year.
“This comes at the time when global mine output fell by 98,000 tonnes or 4.2% in the first half of 2018 according to the latest International Lead and Zinc Study Group data. This is another indication that the global lead concentrate market has tightened and likely to remain so until year end,” Metal Bulletin analyst Andy Farida said.
In copper, prices failed to shrug off concerns of heightening trade tensions between the US and China following news overnight that US President Donald Trump wants to move forward with the imposition of tariffs on another $200 billion worth of Chinese goods as early as next week.
Furthermore, a strengthening dollar against the yuan and weakness in emerging market currencies also weighed on investors’ appetite for the red metals.
The yuan traded at 6.83372 yuan to $1 on Friday, compared with 6.81753 yuan to $1 dollar on Thursday, according to currency exchange rate website Oanda.com.
“Issues in emerging markets also came back into focus, with Argentina’s peso and the Turkey’s lira falling sharply. This saw the Chinese yuan also fall, which raised concerns that consumer would purchase less metal in the future,” ANZ Research noted on Friday.
“The recent weakness in the copper price reflects renewed downward pressure in the yuan in light of the strongly negative correlation between copper prices (denominated in dollars) and the foreign exchange value of the yuan,” Metal Bulletin analyst Boris Mikanikrezai said.
“This takes place amid renewed concern in emerging markets, with the Turkish lira and the Argentinean peso falling to record lows,” Mikanikrezai added.
Base metals prices
Currency moves and data releases