SHANGHAI, Apr 12 (SMM) – Overall social inventories of refined lead in China, including primary and secondary materials, edged down this week as significant declines in prices of futures kept smelters on the sidelines and some suspended spot sales.
SMM data showed that overall lead social inventories declined some 1,800 mt from a week ago to stand at 37,600 mt as of Friday April 12, with stocks across Shanghai and Guangdong shrinking close to 100 mt to 8,200 mt.
After trading rangebound during Monday-Tuesday, lead prices on the Shanghai Futures Exchange tumbled later in the week. Spot sellers, however, did not lower the premiums over the SHFE 1905 contract, given sluggish consumption. Spot premiums remained at 50-100 yuan/mt.
Some lead-acid battery producers purchased lead on demand.
Primary and secondary lead smelters, meanwhile, waited on the sidelines. Some smelters stopped spot trades, which reduced social inventories.
While operations across smelters will hold stable, lead social inventories are likely to continue to fall next week as lead prices are expected to remain weak. Deliverable cargoes will enter the market after the SHFE 1904 contract expires, which will limit declines in social inventories.
