SHANGHAI, May 17 (SMM) – Overall social inventories of refined lead in China, including primary and secondary materials, continued to grow this week as smelters shipped their cargoes to social warehouses to prepare for the delivery of the SHFE May contract and as a continued low consumption season for lead-acid batteries kept overall demand weak.

SMM data showed that lead social inventories expanded some 4,100 mt from a week ago to stand at 39,800 mt as of Friday May 17. Stocks across Shanghai and Guangdong, however, declined more than 1,000 mt to 7,400 mt.

Lead prices dropped at the start of the week, and this triggered some bargain-hunting by bullish traders.

Later in the week, lead prices rebounded, and market sentiment improved. Lead-acid battery producers resumed their procurement. This, together with environmental probes affecting secondary lead supplies, accounted for the decline in stocks across Shanghai and Guangdong.

Lead social inventories are likely to inch down next week, as some primary lead smelters began maintenance and as the impact from environmental inspections sustains.

The discount of secondary lead against primary materials narrowed due to profit concerns and environmental probes, and even flipped into a premium in some transactions. This is likely to drive buyers to primary materials.