SHANGHAI, May 16 (SMM) – Prices of spot lead in China are likely to extend gains in the longer term, driven by an expected uptick in lead consumption and as environmental limitations over secondary lead production continue, SMM believes.
As of Tuesday May 15, SMM assessed 1# lead at 19,450 yuan/mt in average, up over 1,000 yuan/mt from the levels seen at the end of April.
In May, traders became keen on purchases as the market gained. Traders began to stockpile at relatively low prices while some lead-acid battery plants ramped up production as orders grew. This hinted at an overall resilient demand downstream in May.
Output of secondary lead is expected to sharply decline in May as authorities intensify environmental inspections in the secondary lead industry. Rectifications at the secondary lead industrial park in Taihe, Anhui province continued. Meanwhile, secondary lead smelters in Jiangxi, Yunnan and Anhui provinces were required to suspend operations due to environmental probes on illegal disposal of solid waste materials across 11 provinces and cities along the Yangtze River's economic area, from May 9 to the end of June.
Lead inventories in Shanghai and Guangdong fell for four consecutive weeks and stood at 12,500 mt as of May 11, down 43,000 mt year on year.
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