Social inventories of primary lead shrink slower on week

SHANGHAI, Mar 1 (SMM) – Social inventories of primary lead across Shanghai and Guangdong continued to fall this week, but at slower rates as lower premiums of secondary lead attracted part of the downstream demand in the second half of the week. 

SMM data showed that social inventories of primary lead across Shanghai and Guangdong fell over 800 mt from a week ago to stand at 13,200 mt as of Friday March 1. Downstream lead-acid battery plants mostly returned from holidays and maintained on-demand purchases this week. 

In the first half of this week, downstream battery producers favoured primary lead given high premiums of secondary materials. In early trades this week, secondary refined lead was mostly offered in premiums of 100-200 yuan/mt over the average of SMM 1# refined lead. 

In the second half of the week, however, higher prices of lead reduced premiums of secondary refined lead, and also improved margins at secondary smelters. SMM assessments showed that secondary refined lead was offered close to flat over the average of SMM 1# refined lead as of Friday. 

Next week, secondary smelters are likely to accelerate production as margins improve. This is expected to attract a higher share of downstream demand and grow social inventories of primary lead.