SMM Lead Market Morning Review (2015-4-30)

SHANGHAI, Apr. 30 (SMM) – LME lead opened at USD 2,048.5/mt Wednesday night, and then hit a high of USD 2,101.5/mt on falling US dollar index. LME lead ended at USD 2,096/mt, up USD 13/mt, gaining 0.62%. Trading volumes climbed 106 to 3,147 lots, but positions dropped 598 to 147,000. LME lead inventories decreased 4,000 to 179,100 mt.

This Thursday is the last trading day before the May Day holiday in Chinese market. Hence, profit-taking should be warned. LME lead is expected to rise slightly. Trades for spot lead are expected to turn better on replenishing goods before the May Day holiday.
 

US dollar index dropped Wednesday night, supporting base metals. Economic ndicators from US were poor. US annualized Q1 GDP rose 0.2% QoQ, lower than the expected 1% and Q4’s 2.2%, and US annualized Q1 personal consumption expenditure rate climbed 1.9%, lower than the expected 1.7% and Q4’s 4.4%, pushing US dollar index down to 94.67. Later, US Fed April statement reported that recovery of US economy and labor market slowed and Fed’s hawkish speech caused US dollar index to rebound.
In euro zone, April economic sentiment indicator as 103.7, lower than the expected 103.9. German April CPI dropped 0.1% on the month and March CPI rose 0.5% on the month, up 0.3% versus March 2014.

China tries to stimulus construction of city underground pipeline and Minister of Ministry of Housing and Urban-Rural Development announced that if 8,000 km underground pipeline is constructed with RMB 0.12 billion/km, investment should total RMB 1 trillion, accounting for 2% of fixed asset investment. China will extend the range of tax-cutting goods and build more duty-free shops to meet need of consumption upgrading.

European and US stocks all dropped. US dollar index decreased while US crude oil surged 2.66%. Except tin, all LME base metals climbed.

LME lead is expected to move between USD 2,075-2,100/mt. The most active SHFE 1506 lead is expected to move at RMB 13,760-13,860/mt and spot lead RMB 13,800-13,900/mt.