SHANGHAI, May 24 (SMM) – Overall social inventories of refined lead in China, including primary and secondary materials, shank in the week to Friday May 24 as environmental issues lowered the supply of secondary lead.
SMM data showed that lead social inventories decreased by 4,600 mt on the week to stand at 35,300 mt as of Friday May 24, after an increase of 4,100 mt in the previous week. Stocks across Shanghai and Guangdong also dropped some 500 mt, and posted 6,900 mt.
Lead prices rebounded and this improved purchasing enthusiasm across downstream lead-acid battery plants. New round of environmental checks, that commenced last week, continued to impact secondary lead smelters in Jiangxi and Guangdong provinces. Lower supplies buoyed offers of secondary refined lead and drove downstream demand to primary lead.
As of Friday May 24, offers of secondary refined lead stood at a discount of 50 yuan/mt to flat against the average price of SMM1# lead.
This week, downstream purchases lowered social inventories, instead of stocks across smelters, as some primary smelters underwent maintenance and the in-plant stocks already depleted last week.
SMM expects the declines in social inventories to narrow next week as environmental probes draw to a close and this will ease regional supply tightness. Downstream demand will remain limited next week.
