SMM Lead Market Morning Review (2015-10-22)

SHANGHAI, Oct. 22 (SMM) – LME lead started higher at USD 1,770.5/mt overnight and moved around USD 1,775/mt during Asian trading hour. However, LME lead fell back gradually during European and US trading hours in response to crude oil prices, to end at USD 1,738.5/mt, down USD 45/mt or 2.52%. Trading volumes increased 1,234 to 4,089 lots whilst positions dropped 1,590 to 124,708.

US EIA crude oil inventories were up 8.03 million bbl during the week ending October 14, beating the expected 3.5 million bbl. This drove down crude oil prices.

SHFE 1512 lead opened at RMB 13,180/mt for night trading Wednesday and lurched down to RMB 13,030/mt. Later, the contract advanced to RMB 13,255/mt thanks to position closures by shorts before closing at RMB 13,190/mt, down by RMB 190/mt or 1.42%. Trading volumes grew 850 to 6,442 lots but positions fell 366 to 15,196.

Economic figures will come on stream on Thursday. Slipping crude oil prices weigh down base metals. LME lead will hover between USD 1,720-1,750/mt during Asian trading hours. SHFE 1512 lead meets resistance at the 40-day moving average and should fall to RMB 13,100-13,250/mt on October 22. In China, lead smelters ship limited goods to market but downstream consumption stays anemic. Spot lead will slide to RMB 13,250-13,400/mt.