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Lead prices hit fresh lifetime high on MCX on firm demand; outlook remains bullish

The momentum indicator Relative Strength Index is at 58.73 which indicates positive movement in prices.

Mumbai / May 08, 2021 / 06:35 PM IST

Lead prices climbed to a new lifetime high on the MCX tracking weakness in the US Dollar index and general optimism over global economic health.

However, the base metal ended the week with a loss of Rs 3.1 or 1.73 percent for the week. Lead prices rose in three out of the five trading sessions on the MCX.

The non-ferrous metal has been trading higher than 5, 50, 100 and 200 days’ moving averages but lower than the 20-day moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 58.73 which indicates positive movement in prices.

MCX Lead futures initially traded bullish during the April month owing to rising demand in the Asian countries, especially China.

The US dollar index eased 0.81 percent to close at 90.20 against the rival currencies.

According to the International Lead and Zinc Study Group (ILZSG), global refined lead production for February 2021 was reported at 940.4 thousand metric tonnes (MT), lower by 6.47 percent compared to the previous month’s usage of 993.2 thousand metric tonnes.

The metal usage during February 2021 has been reported at 933 thousand tonnes, lower by 5.31 percent compared to the preceding month’s usage of 997.6 thousand tonnes.

Sunand Subramaniam, Senior Research Associate at Choice Broking said, “Looking forward to the coming month, we expect MCX Lead futures to trade bullish as the Chinese, US and Japanese PMI manufacturing data has been reported positively, which is expected to bring a huge boost for the industrial sector.”

“Mining activities in South America is reported to be lower in the coming months with rising coronavirus cases, especially in Chile, Peru and Mexico. Hence, we expect a bullish trend in MCX Lead futures for the coming month,” Subramaniam stated.

In the futures market, lead for May delivery touched an intraday high of Rs 176.45 and a low of Rs 155.70 per kg on the MCX. So far in the current series, the base metal has touched a low of Rs 157.30 and a high of Rs 176.45.

Lead delivery for May contract jumped Rs 0.25, or 0.14 percent, to settle at Rs 175.75 per kg with a business turnover of 1,023 lots. The same for February contract gained Rs 0.35, or 0.20 percent, to close at Rs 176.35 per kg with a turnover of 71 lots.

The value of May and June’s contracts traded on Friday was Rs 291.64 crore and Rs 3.61 crore, respectively.

The base metal end with a gain of 0.21 percent quoting at $2,227.75 per tonne in London.

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Sandeep Sinha
first published: May 8, 2021 06:35 pm