Social inventories of lead ingots fell after ten weeks of piling up

SHANGHAI, Jul 24 (SMM) – Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin ended their ten weeks of increase, dipping over 5,600 mt from a week ago to 42,000 mt, showed SMM data. 

Lead prices recovered after slipped this week. This, together with high prices of battery scrap amid continued tight supply, weighed on profits at smelters and narrowed the discount of secondary lead. As of July 24, trades of secondary refined lead occurred at discounts of 150-100 yuan/mt, ex-work, over the average price of SMM 1# lead. Some trades were even heard at prices flat against the SMM 1# lead.

The narrowed discounts of secondary lead drove downstream consumers to primary lead. Lead inventories in major consumption areas such as Jiangsu and Zhejiang saw significant drops this week as consumers purchased from nearby areas. 

SMM expects lead social inventories to further edge lower next week as price advantage of secondary lead could still underperform primary lead as some smelters in Henan will remain in maintenance next week.