SMM Lead Market Morning Review (2015-5-29)

SHANGHAI, May 29 (SMM) – LME lead opened at USD 1,944.5/mt Thursday night and then soared to USD 1,995/mt, to close at USD 1,992/mt, up USD 39/mt, gaining 2% on weaker dollar. Positions fell 82 as investors remained cautious while trading volumes rose 1,752 to 3,702 lots. LME lead inventories fell 1,000 to 157,025 mt.

Friday will witness US GDP and PCEPI. LME lead should advance modestly with resistance at USD 2,000/mt. Trades muted further due to tight liquidity at the end of month and expectation for growing spot supply.

China’s A-share fell 6% Thursday. Central Huijin Investment cut its funds in four major banks for the first time this year, hurting investors’ confidence. Many brokerages raised margin ratio. Also, a foreign source reported the PBOC will implement hundreds of billions of yuan in repurchasing to tighten liquidity, depressed metals prices.

US existing home sales in April climbed 3.4% MoM, a fresh 9-year high. Last week’s initial jobless claims rose 7,000, below 300,000 for 12 weeks. Final eurozone CCI was -5.5 in line with expectation. May economic sentiment indicator was 103.8, better than 103.5 expected.

US dollar index dropped 0.22% while crude oil and gold prices rose slightly. Major US stocks slipped. LME tin and nickel fell but other base metals increased.

LME lead is expected to move between USD 1,970-2,010/mt today. SHFE 1507 lead should fluctuate between RMB 13,300-13,400/mt and spot lead RMB 13,650-13,750/mt.