SMM Lead Market Morning Review (2015-9-11)

SHANGHAI, Sept. 11(SMM) – LME lead opened at USD 1,715/mt overnight and advanced to USD 1,739/mt at one point thanks to softer dollar and exit of shorts, to end at 1,726/mt, up USD 13/mt. Trading volumes dropped 722 to 3,275 lots and positions decreased 1,644 to 128,488. LME lead inventories fell 1,575 mt to 168,750 mt.

SHFE lead once trended higher to RMB 13,465/mt after opening Thursday evening session at RMB 13,410/mt. But later SHFE lead fell back slightly with longs exiting market before finishing at RMB 13,395/mt, rising RMB 40/mt.

China’s PPI has dropped for 42 consecutive months, fueling expectation for more pro-growth measures. This helped improve market sentiment. LME lead should move in USD 1,710-1,740/mt during Asian trading hours with technical indicators pointing upside. SHFE 1511 lead may underperform LME lead to range between RMB 13,330-13,450/mt on Sept. 11. The SMM/LME lead price ratio is likely to fall back.

Spot lead in China will be offered at RMB 13,350-13,500/mt Friday. Lead smelters will be keen to sell while downstream large producers may gradually build stocks for China’s National Day holiday from Oct. 1-7. Mid-sized and small producers should still purchase on need.