SHANGHAI, May 15 (SMM) – LME lead dropped 2.98% Thursday night. LME lead opened at USD 2032.5/mt and then moved stably during Asian trading hours. But during European trading hours, LME lead fell to USD 1,965/mt, breaking resistance at USD 2,000/mt. LME lead ended at USD 1,967/mt. Trading volumes were up 786 to 5,458 lots and positions up 1,389 to 157,219. LME lead stocks rose 625 to 163,150 mt. LME lead may test the 40-day moving average Friday.
SHFE 1507 lead started at RMB 13,480/mt Thursday evening and later dived to RMB 13,300/mt. The contact finished down RMB 165/mt or 1.22% at RMB 13,320/mt. Trading volumes totaled 3,928 lots and positions rose 286 to 15,354.
News was mixed yesterday. Market capitals failed to stimulate commodity trade, pushing base metals down.
China’s April public budgetary revenue jumped 8.2% YoY but growth in January-April one fell 6.3 percentage points versus January-April 2014. Central financial income grew slowly as slipping commodity prices and imports dragged down tax revenue. Besides, manufacturing growth also slowed with continuous PPI declines cutting VAT revenues. China’s April power consumption totaled 441.5 billion kwh, up 1.3% MoM. January-April power consumption grew 0.9% versus January-April 2014 to 1,731.6 billion kwh, but industrial electricity consumption dropped 0.8%. Upgrade in industrial structure speeded up and manufacturing still muted, weighing on base metals.
US initial jobless claims just slipped 1,000 to 264,000 in the week ending May 8, better than expectation and below 270,000 for three weeks. However, the upbeat indicators failed to raise hope for US Fed’s interest rate hike as Mr. Kohn, the former Vice Chairman of the Fed, reported that weaker-than-forecast April retail sales killed the possibility of raising interest rate in June, pushing US dollar index down 0.32% to 93.37.
Growth in gold price hit a 3-month high by 0.6%. Crude oil price finished down 1% as Iran problem failed to support it. European and US stocks rose across the board while LME base metals all dropped with the largest drop in lead and zinc.
LME lead will move between USD 1,940-1,980/mt. SHFE 1507 lead should fluctuate between RMB 13,250-13,400/mt and spot lead 13,500-13,650/mt.
