SHANGHAI, Jun. 4 (SMM) – Inventories of lead were shifted from Guangdong to Jiangxi due mainly to the price spread between the two markets, Shanghai Metals Market survey finds.
Supply shortfalls in Jiangxi, resulting from unit maintenance at local smelters and regular suppliers, left prices 300-400 yuan higher than goods in Guangxi, leading to the shift of goods between the two regions, SMM says.
After conducting transportation costs of around 200 yuan per tonne, it is still profitable for traders to shift goods from Guangdong to Shanghai.
Transport convenience, taking about 1-2 days between the two, also reduces their exposure to price risks.
The shift of goods has led to a drop of 1,200 tonnes of lead in Guangdong’s Nanchu inventories in 2-3 June, SMM learns.
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