SHANGHAI, Aug. 27 (SMM) – SHFE 1510 lead gapped lower at RMB 13,145/mt for night trading Wednesday and then ranged between RMB 13,115-13,275/mt, to close at RMB 13,190/mt, losing RMB 110/mt. Trading volumes declined 4,416 to 2,810 lots and positions also dropped 84 to 17,234.

The most actively trade contract broke out above RMB 13,300/mt during Thursday trading session as iron ore, rebar and rubber futures prices grew quickly after the open. Then the contract ranged between RMB 13,260-13,300/mt and increased near session’s end responding to a rise in Chinese stock market, to close at RMB 13,355/mt, up RMB 55/mt. Trading volumes were about 6,356 lots while positions decreased 634 to 16,684 with shorts exiting market.

SMM/LME lead price ratio already stands above 8, but expectation for more depreciation in yuan exists and less lead imports flow into China. SHFE 1510 lead does not suffer sell-offs. As such, SHFE 1510 lead should test resistance at RMB 13,350/mt in short term.