SMM News: London Metal Exchange (LME) lead fell on Friday, but this week is still up nearly 1%, and rose for the third week in a row, as smelter shutdown led to a shortage of lead supply, and led to LME lead stocks to the lowest water level in 10 years.
17:00 on July 26, London time (00:00 on July 27, Beijing time), three-month lead closed down 2.3 per cent, or $49.50, at $2065 a tonne.
Lead prices have climbed more than 15 per cent since hitting a three-year low in May.
Kash Kamal, an analyst at BMO, said moves by Chinese smelters to shut down and clean up the polluting sector had led to lower-than-expected supply and supported prices.
But the analyst said he expected long-term weak demand to mean that lead prices should remain at about $2000 a tonne.
LME lead stocks, which total 55475 tons, have fallen 50 per cent since the start of the year, the lowest level since 2009.
The discount between spot lead and three-month lead in LME has disappeared, indicating a recent tightening of supply.
(ILZSG), an international lead and zinc research group, said in May that after a supply shortage in 2018, there would be a global oversupply of 71000 tons of refined lead in 2019.
However, production at two large Chinese smelters and Nyrstar's Pirie Port smelter in Australia could result in a reduction of about 50, 000 tons, ING analysts at (ING) said in a report.
"in the future, the risk of supply shows that the downside risk is still very large."
Analysts said the oversupply would be lower than previously expected or the market would return to a balance between supply and demand.
Global lead consumption is about 12 million tons per year.
Henan Yuguang Gold and lead Co., Ltd., China said it had resumed production at the Jiyuan smelter with an annual production capacity of 400000 tons of lead.
Manufacturing output is slowing in major markets such as China, Europe and the US, and the US economy is likely to grow at its slowest pace in more than two years in the second quarter.
Trade disputes between the United States and China have curbed economic growth and pushed metal prices sharply lower.
The 12th round of Sino-US high-level economic and trade consultations between China and the United States will be held in Shanghai from July 30 to 31.
"in order to implement the important consensus reached at the Osaka meeting between the two heads of state, the leaders of the two sides will meet in Shanghai from July 30 to 31," Gao, spokesman for the Ministry of Commerce of China, said at a regular news conference held on the 25th. The 12th round of Sino-US high-level economic and trade consultations will be held on the basis of equality and mutual respect. "
Rusal (Rusal) reported Friday that aluminum sales rose 21% in the second quarter from the previous quarter as the company recovered from 10 months of U. S. sanctions.
Aluminium sales totaled 1.08 million tonnes in the second quarter, while production rose 1 per cent to 938000 tonnes.
PT Timah, Indonesia's largest tin miner, expects refined tin production to more than quadruple this year to about 70,000 tons.
The dollar rebounded to a two-year high hit in May, as a stronger dollar made metals more expensive for buyers holding other currencies.
Most other industrial metals also fell as weak economic data weakened the demand outlook. This week, all basic metals except zinc recorded weekly declines.
Copper for three-month delivery closed down 0.7 per cent, or $42, at $5963 a tonne.
Three-month aluminium closed down 1.3 per cent, or $24, at $1802 a tonne.
Three-month zinc fell 0.1 per cent, or $2, to $2438 a tonne.
Three-month tin fell 1.1 per cent, or $200, to $17650 a tonne.
Three-month nickel rose 0.2 per cent, or $25, to $14100 a tonne.