SMM Lead Market Morning Review (2015-10-15)

SHANGHAI, Oct. 15 (SMM) – LME lead started at USD 1,777/mt overnight and moved around USD 1,770/mt during Asian trading hours. LME lead lurched up during European and US trading hours responding to weaker dollar and closed up USD 23.5/mt or 1.32% at USD 1,799/mt. Trading volumes dropped 1,704 to 2,556 lots and positions fell 536 to 124,730.

SHFE 1512 lead followed LME lead up to RMB 13,645/mt after opening Wednesday evening session at RMB 13,580/mt. With shorts exiting market, the contract ended above the 5-day moving average at RMB 13,595/mt. Trading volumes decreased 2,634 to 998 lots while positions grew 48 to 15,342.

US weaker-than-forecast PPI and poor retail sales data for September boost the case for a delay in Fed’s rate hike, pushing down US dollar. As such, LME lead should move in USD 1,780-1,810/mt during Asian trading hours. SHFE 1512 lead finds solid support at the 5-day moving average and is expected to range between RMB 13,530-13,680/mt on October 15. Spot supply is not ample in China but downstream lead-acid battery producers tend to cut operation, leaving both supply and demand softening. Thus, spot lead is likely to move in RMB 13,500-13,600/mt.