Hong Kong (Platts)--18Mar2011/401 am EDT/801 GMT
China Securities Regulatory Commission's approval for Shanghai Futures Exchange to launch lead futures bolstered London Metals Exchange's official lead prices Thursday, industry sources in China said Friday. In its announcement on Thursday, CSRC said the exact launch date would depend on the market conditions as well as the progress of SFE's preparation. According to CSRC, each lot would be 25 mt, and movement in daily prices would be limited to 5% from the previous day's settlement. The LME three month lead price hit $2,667/mt Thursday, up around 3% from Wednesday. "Lately, LME lead prices have already jumped considerably ... News of the lead futures launch in China lifted prices further yesterday. If prices keep rising in the coming days, we anticipate market players starting to sell their inventories on profit-taking," a lead trader in Zhejiang Province said. Meanwhile, although some China industry experts said the launch of lead futures should support prices, others said it was still too early to reach any conclusion. "The authorities concerned are currently just testing the lead futures platform by means of simulation accounts," a commodity analyst with a Shanghai-based futures company said. "So we have to wait and see whether market players would accept it psychologically to see its future impact on prices." A source with a Henan-based Chinese lead producer said: "Whether the launch of lead futures will bolster prices will depend on how enthusiastic the people are ... it will be some time after the formal operation of the platform starts before its impact on future lead prices [can be seen]." Industry experts said the launch should benefit both lead producers and consumers in the country. The Shanghai commodity analyst said the launch of lead futures might provide a unified pricing system that would help both producers and downstream consumers. The Henan-based source added that it would help producers make better decisions on output and sales targets. China's domestic lead consumption hit 3.642 million mt in 2010, up around 9% from 2009, figures from China's Ministry of Commerce showed. --Joshua Leung, newsdesk@platts.com Similar stories appear in Metals Week. See more information at http://www.platts.com/Products/metalsweek