SHANGHAI, Feb. 26 (SMM) – Despite a surprise rebound in HSBC’s China Manufacturing PMI, LME lead overnight fell to a low of USD 1,745/mt and closed at USD 1,752/mt. Trading volumes for three-month lead on the London Metal Exchange gained 872 lots to 3,776 lots, while positions added 120 to 123,000. LME lead inventories increased 1,050 mt to 213,750 mt on Wednesday.

Lead for April delivery on the Shanghai Futures Exchange, the most active contract, ended down RMB 65/mt at RMB 12,240/mt in Wednesday’s night session. Trading volumes for the most active contract totaled 1,832 lots.

US Federal Reserve Chairwoman Janet Yellen testified on Wednesday before a House Financial Services Committee that the timing of an interest rate increase is flexible, sending the US dollar index down.

HSBC’s preliminary China Manufacturing PMI rebounded to a new four-month high of 50.1 in February, beating 49.5 expected and the final reading of 49.7 in January. The output sub-index rose to a five-month high of 50.8, up from January’s 50.3. The sub-indices tracking output and new orders accelerated to rise. However, the new export orders sub-index leveled off, while the employment sub-index fell at a sharper pace. The input and output prices declined at a slower rate.

China’s Premier Li Keqiang announced in a routine meeting on Wednesday to speed up construction of major waterworks and stimulate economic growth via public goods investment. A consensus was reached at the meeting to ramp up active fiscal policy to help stabilize the Chinese economy.

US new home sales totaled an annualized 481,000 in January, higher than expectations, but below December’s 482,000. The homes sales edged down 0.2% MoM over the month, a fall smaller than a 2.3% decline expected.

Saudi Arabia’s Oil Minister Ali al-Naimi stated on Wednesday that oil demand is growing and the crude oil market has turned “calm” and that he is satisfied with the new trend in the market. This helped US benchmark crude prices close up 3.47% on Wednesday.

The US dollar index fell 0.27%, while the euro inched up 0.18% versus the greenback. European and US stocks were mixed. LME copper and tin rose slightly, but other base metals all fell.

A series of economic indicators will be released on Thursday, including the euro zone’s economic climate index for February, US CPI and durable goods orders for January. LME lead is expected to test support at an early low of USD 1,743/mt and move between USD 1,740-1,770/mt. The most active SHFE 1504 lead contract is set to hover between RMB 12,180-12,280/mt. Spot lead prices in China should fall slightly to RMB 12,350-12,450/mt.