SMM Lead Market Morning Review (2015-10-16)

SHANGHAI, Oct. 16 (SMM) – LME lead once touched a high of USD 1,832/mt overnight after starting at USD 1,796/mt. Nonetheless, LME lead retreated all the gains in response to dollar rally. Trading volumes grew 2,308 to 4,864 lots whilst positions declined 708 to 124,022.

US September’s CPI fell 0.2% from August, flat with a year ago. Both MoM and YoY growth in Core CPI (excluding food and energy prices) beat forecast. Besides, US initial jobless claim figure during the week ending October 10 refreshed a 42-year low. US dollar thus got a boost.

SHFE 1512 lead started below the 5-day moving average at RMB 13,555/mt on Thursday night and dived to RMB 13,455/mt responding to LME lead. Later, the contract rebounded and ended at RMB 13,545/mt, down by RMB 35/mt. Positions fell 196 to 15,172.

US dollar is expected to head for gains on Thursday amid most upbeat US economic data. Hence, LME lead should face pressures and move in USD 1,790-1,810/mt dueing Asian trading hours. SHFE 1512 lead will move on the weak side between RMB 13,450-13,600/mt on October 16. Spot supply grows slightly in China while downstream consumption stays weak. Spot lead is predicted to fall RMB 25/mt to RMB 13,450-13,600/mt.