SMM Lead Market Morning Review (2015-6-10)

SHANGHAI, Jun. 10 (SMM) – LME lead started at USD 1,915/mt during Asian trading hours and rose to USD 1,930/mt owing to expectation for China’s another reserve rate cut. The metal touched USD 1,951.5/mt during European trading hours and finally ended the session up USD 16.5/mt at USD 1,932.5/mt. Trading volumes climbed 895 to 4,123 lots with positions down 52 to 143,253. LME lead inventories jumped 425 to 156,200 mt.

The August-delivery lead on SHFE opened at RMB 13,200/mt during evening session Tuesday and moved narrowly between RMB 13,200-13,240/mt with SMM/LME lead price ratio of 6.8.

Growth in May’s CPI slowed in China and PPI failed to climb, posting pressures on industrials. That, together with downbeat import & export indicators and market expectation for investing data in May, raised hope for fresh stimulus measures. MSCA will include of China’s shares in its equity benchmarks, rallying investors’ confidence.

In euro zone, Q1’ GDP grew 1% versus Q1’s in 2014, but only jumped 0.4% QoQ, because growth in import was twice than that in export in Q1, boding ill for foreign trade. Those data were both on par with estimates and the flash data.

Markets expect US retail sales to be up 1.1% in May and its new hiring data increased to 5.4 million in April, a fresh high since December, 2000. The possibility of Fed’s interest rate hike sent US stocks down 0.03%.

Crude oil price surged 3% thanks to falling inventories, favoring base metals. London gold closed up 0.26%. European and US stocks all slipped. LME base metals dropped after a high.

LME lead should move between USD 1,910-1,950/mt today. SHFE 1508 lead is expected to fluctuate between RMB 13,150-13,300/mt and spot lead RMB 13,550-13,650/mt.