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Lead prices in LME platform tested 5-month low while SHFE lead prices neared yearly low. Base metals were broadly bearish last amid power rationing, slowing industrial demand and economic growth concerns in China.

Global Economy

• Equity gauges across globe drifted to negativity over last week. US Dow Jones Index slipped 1.36 percent, key European and Asian gauges slipped.

• US treasury yield rose to three month highs.

• US ISM Manufacturing PMI increased to 61.1 in September 2021, up for a second straight month.

• China Manufacturing PMI was at 49.6 points in September 2021, posting the first contraction in factory activity since February 2020,

• China's industrial profits increased by 49.5 percent YoY in January-August 2021, following a 57.3 percent surge in the prior period and slowing for the 6th straight month.

Lead

• LME lead futures eased 0.60 percent, SHFE lead futures shed by 2.42 percent last week.

• Near month MCX lead futures fell 4.98 percent in the last week.

• Lead inventory levels in LME decreased by 2.86 percent, while stocks in SHFE fell by 4.37 percent.

Outlook

Hopes of a quick global economic recovery and higher industrial demand from Chines continue to offer lower level support to base metal prices. Meanwhile, a strong US currency may limit major upside.

LME: Expect to continue the positive outlook as long as prices hold the downside support of $1900. Consistent trades below $1880 is a sign of reversal.

MCX: While prices stays above 175 bullish outlook to continue in near term. A close below the same is a weak signal.

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