Three-month lead has moved up over 12 percent on the London Metal Exchange over the past month — including an 8 percent gain since the beginning of September — to close at $2,116 a tonne on September 11.
The most recent jump was part of a broader base metal rally after the European Central Bank announced that it is ready to help shore up debt-saddled Eurozone governments by purchasing their short-term bonds. Another positive factor was the Chinese government’s announcement that it has approved infrastructure projects worth over $150 billion in a bid to halt the economic slowdown in that country.
“The fact that the plans were sanctioned by central government rather than by regional governments has lent some additional weight,” said Standard Bank analyst Leon Westgate in an article in The Australian. “This spending is a similar size to the level seen in the 2008-09 stimulus, however, this time it is much more targeted [and] stretched out over a much longer timescale.”
Finally, lead and other base metals have moved higher on expectations that the US Federal Reserve will announce another round of quantitative easing after its meeting on September 13. Those expectations were heightened after a worse-than-expected jobs report out of the US last week.