SMM Lead Market Morning Review (2015-6-24)

SHANGHAI, Jun. 24 (SMM) – LME lead ended Tuesday evening session at USD 1,794.5/mt, up USD 29.5/mt or 1.67% thanks to eased Greece debt issue and upbeat data from China and eurozone. Trading volumes rose 833 to 4,117 lots with positions down 1,719 to 140,000. LME lead inventories dropped 800 to 171,400 mt.

The flash data of HSBC’s China manufacturing PMI for June was 49.6, a three-month-high and better than forecast and May’s data, supporting lead prices. Output index increased from May’s 49.3 to 50, a 2-month-high, and flash data of new order sub-index grew to 50.3, the first growth in four months.

US May’s annualized new home sales was 546,000, hitting a fresh high since February 2008, up 2.2% MoM. But May’s durable goods orders fell 1.8% MoM and April’s FHFA home price index rose 0.3%, short of 0.5% expected. Also, initial value of Markit’s manufacturing PMI was 53.4, a new low since October 2013. Even so, US stocks still rose yesterday due to 50% possibility of the Fed hiking interest rate in September.

Economic indicators from eurozone were positive. Flash data of June’s PMI composite output index increased from May’s 53.6 to 54.1, hitting a 49-month high. Service and manufacturing indexes performed well.

Ongoing Greece debt crisis eased slightly, but investors still stayed cautious.

US dollar jumped 1.14% and crude oil price was up 1.04%. London gold fell for straight three days, down 0.62% to 1178.7. European and US stocks all grew. LME base metals rebounded.

LME lead should increase slightly to USD 1,985-2,015/mt today. SHFE 1508 lead may move between RMB 13,015-13,150/mt and RMB 13,300-13,450/mt for spot lead.