SMM Lead Market Morning Review (2015-5-7)

SHANGHAI, May 7 (SMM) –  LME lead started at USD 2,159/mt Wednesday evening and hovered between USD 2,140-2,160/mt. But LME lead dropped considerably during European and US trading hours, to finish at USD 2,048/mt, falling USD 73/mt, or 3.38%. Trading volumes climbed 1,864 to 6,013 lots and positions grew 101 to 151,941. LME lead inventories decreased 3,900 to 166,350 mt.

SHFE 1507 lead, the most active contract, started at RMB 13,840/mt and then edged down to RMB 13,565/mt, to end at RMB 13,620/mt, down RMB 295/mt, off 2.12%.

Data from US were poor. US April new hiring growth in the private sector was only 169,000, much lower than expectation. April ADP hiring data was far below expectation, the lowest since January 2014. Previous number was adjusted to a lower level, indicating that non-farm payroll data due out Friday will be below expectation, while bond yields in most euro zone countries rose, attracting lots of capitals, pushing US dollar index down over 1.3%.

US EIA crude oil inventories fell 3.88 million bbl in the week ending May 2 with expectation of 1.5 million bbl and previous value of 1.91 million bbl.

In euro zone, April composite PMI was 53.9, higher than expectation and preliminary value but lower than final reading of March’s service PMI 54.1, higher than expectation and preliminary value.
China’s April composite PMI was 51.3, lower than March’s 51.8, hitting a 3-month low. But April service sector PMI was 52.9, higher than March’s 52.3.

US dollar index fell 1.05% while euro surged 1.44%. Most US and European stocks dropped. Shanghai composite index fell over 1%. Expect tin, all LME base metals dropped.

LME lead is expected to test the 20-day moving average and find support at USD 2,060/mt. LME lead should move between USD 2,060-2,100/mt. SHFE 1507 lead is expected to hover between RMB 13,580-13,750/mt and spot lead RMB 13,700-13,850/mt.