SHANGHAI, Jun 6 (SMM) – Overall social inventories of refined lead in China, including primary and secondary materials, continued to dip this week as a rally in lead prices and the confirmation of production cuts at some lead-acid battery producers fuelled offloading inclination among sellers.
SMM data showed that lead social inventories dipped over 500 mt from Friday May 31 to stand at 34,300 mt as of Thursday June 6. Stocks across Shanghai and Guangdong extended their gains this week, rising some 800 mt to 8,700 mt.
Continued maintenance at primary lead smelters prompted spot lead sellers to hold offers firm earlier in the week, with common domestic brands being quoted in a premium of 60-100 yuan/mt over the June contract on the Shanghai Futures Exchange.
Sellers became more willing to discharge cargoes later in the week, as lead prices recovered and as production cutbacks at lead-acid battery producers lower demand. Their quotes for some brands fell to an almost zero spread relative to the SHFE 1906 contract.
For the Dragon Boat Festival at this weekend, some large battery producers will maintain normal operations, while most battery plants would shut for a maximum of three days.
Weaker demand, combined with stable production at smelters, grows the possibility of a pick-up in inventories after the holiday.
