SMM Lead Market Morning Review (2015-11-6)

SHANGHAI, Nov. 6 (SMM) – LME lead opened at USD 1,680/mt overnight and then lurched down responding to firm dollar and crude oil price declines, to end at USD 1,653/mt, down by USD 26/mt or 1.55%. Trading volumes grew 1,176 to 4,695 lots and positions were up 36 to 124,329.

SHFE 1512 lead gapped lower at RMB 12,970/mt for night trading Thursday and then attempted to break above RMB 13,000/mt but fell back, to end at RMB 12,975/mt. Trading volumes fell 1,114 to 2,562 lots and position declined 162 to 10,744.

The drop in US last week’s initial jobless claims was the largest in eight months but still below 300,000 for 35 straight months, mirroring US job market reaming healthy. This also boosts positive expectation for US non-farm payrolls due out Friday evening. When combined with hawkish tone of Yellen’s speech, US dollar gets support, weighing down base metals. 

Amid bearishness in market, LME lead should move in USD 1,635-1,665/mt during Asian trading hours. SHFE 1512 lead will range between RMB 12,900-13,050/mt on November 6. In China’s spot market, market activities decline markedly and smelters maintain shipment to market. On the other hand, down consumption stays weak. Spot lead will fall to RMB 13,100-13,250/mt.