SMM Lead Market Morning Review (2015-11-19)

SHANGHAI, Nov. 19 (SMM) – LME lead started at USD 1,583/mt overnight and once drifted lower to USD 1,571/mt due to strong dollar, hitting a new low since June 2010. But later LME lead rebounded due to exit of shorts and ended at USD 1,587/mt, edging up USD 0.5/mt. Trading volumes reduced 1,168 to 4,162 lots and positions fell 4,428 to 126,153.

US new home starts for October missed forecast but building permits grew 4.1% MoM and kept above 1 million for 7 months in a row, mirroring stable housing market. Besides, most US Fed officials support to raise rate in December, supporting dollar.

SHFE 1601 lead fell below RMB 12,000/mt for night trading Wednesday due to strong dollar and resistance at the 5-day moving average, after starting at RMB 12,150/mt. The contract finally closed at RMB 11,990/mt, down by RMB 165/mt. Trading volumes dropped 8,678 to 4,170 lots while positions were up 346 to 14,344.

Markets expect US continuing jobless claims to be upbeat and US dollar should stay at highs. LME lead will move in USD 1,570-1,590/mt during Asian trading hours. SHFE 1601 lead should range between RMB 11,900-12,050/mt on November 19. In China, some lead smelters hold back sales and downstream buyers are pessimistic over lead prices. Spot lead will fall to RMB 12,600-12,750/mt.