SMM Lead Market Morning Review (2015-5-13)

SHANGHAI, May 13 (SMM) – Tuesday night, LME lead dived to USD 1,995/mt after opening at USD 2,013/mt. LME lead touched USD 2,064/mt due to declining US dollar index and growing crude oil price but met resistance at the 20-day moving average, to end at USD 2,059/mt, up USD 46.5/mt or 2.31%. Trading volumes rose 1,162 to 5,394 lots while positions decreased 915 to 154,717. Stocks for LME lead fell 150 to 162,600 mt.

SHFE 1507 lead started Tuesday evening session at RMB 13,445/mt and moved higher to RMB 13,550/mt in response to rising LME lead. The contract finished up RMB 135/mt or 1.01% at RMB 13,510/mt.

Falling US dollar index added support to base metals. Greece used its 10-year emergency reserve funds to pay IMF EUR 0.75 billion, supporting euro and pushing US dollar index down to 94.59. According to JOLTS, US March job openings cut 0.15 million on the month from February’s 5.14 million to 4.99 million, but climbed 19% versus March 2014. US April small business confidence, employment and CPI all improved but dollar and oil price risked manufacturing, weighing on US dollar index and favoring base metals.

China’s indicators played an import role. Chinese mainland FDI from January to April jumped 11.1% to RMB 273.61 billion, versus January-April 2014. Value added of the industrial enterprises above designated size grew faster in April, with that of non-state ones climbed 7.5% versus April 2014, including a 7.7% growth in privately held companies. China’s January-April private investment surged 13% compared with January-April 2014.

European and US stocks dropped across the board. Crude oil prices finished up 2.5% due to OPEC raising demand forecast. LME base metals all increased.

LME lead should trade at USD 2,040-2,090/mt. SHFE 1507 lead is expected to move at RMB 13,450-13,550/mt and spot lead 13,650-13,800/mt.