Lead highlights

摘要

The last three weeks have been particularly turbulent for lead prices. On an official three-month basis, the market hit a new high of 1,374 dollars/tonne on January 25 and 26, shed 100 dollars/tonne the next day, then bounced back again to a fresh record of 1,411 dollars/tonne by February 2. The roller-coaster ride was not over, as the market collapsed again over the following week, falling to 1,256 dollars/tonne. At the time of writing, the market is still extremely volatile, which is not an encouraging sign for any lead bulls, as it could be marking the peak. Indeed, the rise in LME open interest that accompanied the sharp price reversal indicates that the driving factor was new shorts being put in place. This suggests that the bears are taking control and are banking on further price weakness. It remains to be seen whether the short holders will be swamped by fresh buying and will be forced to cover.