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SMM Lead Market Morning Review (2015-6-3)
Jun 3,2015 10:08CST
price review forecast
Source:SMM
LME lead opened at USD 1,929.5/mt during Asian trading hours and touched USD 1,947/mt thanks to the PBOC’s issuing pledged supplementary lending (PSL) to China Development Bank.

SHANGHAI, Jun. 3 (SMM) – LME lead opened at USD 1,929.5/mt during Asian trading hours and touched USD 1,947/mt thanks to the PBOC’s issuing pledged supplementary lending (PSL) to China Development Bank. Later, LME lead fell backed to USD 1,930/mt after meeting resistance at the 5 and 10-day moving average. Good news and upbeat data from euro zone, pushing euro up and dollar down during European and US trading hours. In response, LME lead advanced to USD 1,950/mt, to close down USD 3/mt at USD 1,927/mt with shorts gathering strength. Trading volumes fell 171 to 3,247 lots and positions dropped 1,342 to 151,194. LME inventories were left unchanged.

SHFE 1508 lead fell slightly following LME lead with SMM/LME lead price ratio holding stably at 6.85. The contract opened at RMB 13,190/mt Tuesday night and soared to RMB 13,255/mt, to finish down RMB 15/mt at RMB 13,175 as shorts entered market.

The Wall Street Journal reported that EU and IMF representatives finished drafting their Greece assisting agreement, easing worries about Greece crisis and sending euro up. But concerns whether Greece will accept the agreement still existed. Euro zone’s preliminary and preliminary core CPI for May rose 0.3% and 0.9% YoY, respectively, both better than estimate. Also, positive inflation indicators showed QE’s impact, posting an ongoing recover in economy.

US factory orders in April slipped 0.4% MoM and durable goods orders dropped 1%, falling short of estimate and previous one, depressing US stocks and dollar. The Fed’s Lael Brainard expressed that US economy In Q2 failed to show rebounding posture.

The PBOC announced that PSL balance was RMB 645.9 billion late May with new PSL of RMB 262.8 billion during the first five month of 2015. The PBOC cut PSL interest rate since 2015 to now’s 3.15, felling 31% than last year. The PBOC has injected capital through PSL to increase liquidity and reduced borrowing costs. Another Chinese company defaulted this week.

US dollar index fell 1.55% while the euro was up 2.04%. US stocks fell and European stocks diverged.
LME base metals all jumped except aluminum and lead.

LME lead will move between USD 1,900-1,940/mt today. SHFE 1508 lead should fluctuate between RMB 13,100-13,250/mt and spot lead RMB 13,550-13,700/mt.
 

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