Weak consumption continues to grow lead social inventories 

SHANGHAI, Jun 21 (SMM) – Overall social inventories of refined lead in China, including primary and secondary materials, extended their increases this week as sluggish trades in the lead-acid battery market continued to depress purchases by battery producers. 

SMM data showed that lead social inventories rose by some 500 mt in the week to Friday June 21, to stand at 34,300 mt. Inventories in Guangdong as of Friday June 14 were revised to 3,000 mt. 

Sellers of primary lead tended to firm up offers as prices of futures failed to stop declining after the delivery for SHFE June contract. As of Friday June 21, offers of domestic brands stood mostly flat to a premium of 50 yuan/mt over the SHFE July contract. 

However, offers of secondary refined lead maintained in discounts, and this drove consumers to the secondary material. As of Friday June 21, discounts of secondary refined lead kept at 100-150 yuan/mt against the average price of SMM #1 lead, with the deepest discount down to 200 yuan/mt. 

Next week, recovery from maintenance across some primary smelters may extend the increase in social inventories of refined lead, as consumption is unlikely to improve.