Lead social inventories fell slower as smelters resumed sales after prices rebounded

SHANGHAI, Mar 27 (SMM) – Social inventories of lead ingots in China continued to fall this week, as downstream consumers kicked off a new round of long-term contracted procurement.

SMM data showed that lead social stocks across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin decreased about 7,800 mt in the week ended March 27 to 17,900 mt.

This week’s decline was smaller than a decline of more than 10,000 mt in the previous week, as primary and secondary lead smelters resumed sales after lead prices rebounded.

Smelters remained reluctant to sell their cargoes earlier in the week, forcing downstream consumers to source raw material from the spot market. Spot trades were done in high premiums, and quotes for domestic materials were in premiums of 200-300 yuan/mt over the SHFE 2004 contract.

Lead ingot social inventories in China are expected to fall further slower next week, as smelters turn willing to discharge cargoes and as secondary lead smelters in Anhui, Jiangxi and other regions are recovering their production.