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Worse-than-expected consumption suppresses lead prices

iconJul 19, 2018 12:54
Source:SMM
Lead demand fell short of expectations since July and prices decreased all the way down as a result

SHANGHAI, Jul 19 (SMM) – While the lead-acid battery market has already entered the traditional peak season in July-August, demand for lead fell short of expectations since the start of this month.

As of Wednesday July 18, SMM 1# lead averaged at 19,125 yuan/mt, down over 2,000 yuan/mt from the end of last month.

Some small- and medium-sized lead-acid battery plants stopped procuring lead ingot and suspended their production for seven to 10 days from the start of July on concerns over costs after lead prices jumped in late June, SMM learned.

A fresh round of environmental probes in Jiangxi province was another headwind against lead consumption. Some lead-acid battery plants in Yichun city in the province suspended their production again after a brief recovery at the beginning of this month with close to 1,000 mt of lead consumption affected every day. This round of probes is expected to last until July 25.

Meanwhile, battery producers’ new orders from auto-makers were sharply down as auto-makers gave their workers seven to 15 days off on high temperatures.

In addition, high finished goods inventory hampered the producing enthusiasm of battery plants. Inventory at dealers shrank at a slow pace given sluggish consumption at end-users. Buyers’ interest was also depressed by falling lead prices as they were reluctant to buy on the way down.

The US-China trade disputes, softer Chinese economic data in the second quarter, recovering primary or secondary lead production also accounted for the decline in lead prices.

 

Market commentary
Lead

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