Stocks of primary lead drop as downstream returns to primary lead

SHANGHAI, Nov 16 (SMM) – Social inventories of primary lead in Shanghai and Guangdong dipped 2,000 mt over the week ended November 16 to stand at 17,500 mt as narrowed price gaps with secondary lead drove downstream buyers to return to primary materials, SMM research found.

Earlier in the week, downstream buyers favoured secondary lead as smelters offered secondary materials at discounts of 400-300 yuan/mt against SMM 1#, ex-factory. The discounts narrowed later in the week, to 250-150 yuan/mt as of Friday, as environmental probes impacted operation at secondary lead smelters. This drove buyers to purchase primary lead and seaborne materials, and lowered social inventories of primary lead.