SHANGHAI, Jul. 13 (SMM) – Eyes should be on China’s June balance sheet, annual import and export, US’s annual PPI and initial jobless claim from the week ending July 7 on Thursday. Crude oil dropped from highs on Wednesday’s night trading after meeting resistance. US dollar index is closed to the previous lowest level, and will fell below 95.47 if there is no positive news. Base metals will fluctuate at current level and diverge with mixed news.

China’s import growth was higher than that of export since the starts of supply-side structural reform in 2016. Favorable balance trade value dropped in the first five months from the same period of last year, but the big growth shored up exchange rate of yuan. According to official manufacturing PMI in June, index of production, new orders and new export orders all increased, and Caixin manufacturing PMI also rallied above 50 with improving index of new orders and production. This shows positive economy growth in China. Rising domestic demand will send import up in June, while export data is expected to drop slightly.

SMM Price Outlook for Base Metals on SHFE (Jul. 13, 2017)

US’s unemployment rate was low, and nonfarm payrolls registered higher-than-expected growth, indicating that US’s labor market is closed to full employment. As such, initial jobless claim will reduce in the week ending July 7.There is a possibility for US’a annual PPI to drop in June due to lower annual CPI than prediction and April’s level in May. Weak inflation will be the biggest stumbling block for rate hike.

Nigeria oil minister indicated that the ideal crude oil price is USD 55-60/bbl, and will support oil output restriction in Nigeria.