SHANGHAI, Apr. 3 (SMM) – LME lead prices overnight basically hovered above the opening mark after starting at USD 2,046/mt, meeting resistance at the 5-day moving average. The metal later rose to a high of USD 2,064.25/mt, boosted by China’s pro-growth policies, but finished only up USD 8.5, or 0.42%, at USD 2,055.5/mt due to a rally in the US dollar index. Trading volumes fell by 124 lots to 3,888 lots, positions gained by 526 lots to 138,317 lots, and LME lead inventories held flat at 201,650 mt.

Chinese government outlined a modest stimulus against the flagging growth after a meeting on Wednesday, including railway investment, tax relief for smaller companies, and low-income housing. The government planned to put over 6,600 km of railway lines into operation this year, a rise of 1,000 km from 2013. Of them, nearly 80% will be constructed in central and west China. Besides, measures for further railway investment reforms were also proposed.

Economic data in the US and Europe showed diverged trends. The euro zone PPI dropped 0.2% on the month in February, down 1.7% from a year ago, its biggest YoY decline since December 2009. Euro zone’s GDP growth for the last quarter of 2013 was revised down from 0.3% on a quarterly basis to 0.2%. The data fueled expectations that the European Central Bank may roll out more easing policies.

In the US, the ADP reported private sector added 191,000 jobs in March, lower than the 195,000 expected, but February’s figure was revised up to 178,000. February factory orders increased 1.6% in February, its best showing in five months, and beating the 1.2% growth expected.

The US dollar index increased markedly. European and US equities both rose. All base metals on London Metal Exchange, except zinc, registered growth.

Investors should continue to focus on US March layoffs report from consultants Challenger, Gray & Christmas and initial jobless claims for last week. In addition, the European Central Bank’s interest rate decision and US non-manufacturing PMI due Thursday should also be eyed.

LME lead prices are expected to move between USD 2,040-2,065/mt, while the most active SHFE 1405 lead contract price is set to hover between RMB 13,640-13,740/mt on Thursday. In China’s physical lead markets, traded prices will be mostly between RMB 13,550-13,700/mt with weaker downstream buying interest.