Lead social inventories slowed declines amid resumption of secondary lead supply

SHANGHAI, Mar 13 (SMM) – Social inventories of lead ingots in China extended their declines this week, but at a slower pace than a week earlier as more secondary lead smelters restarted production. 

SMM data showed that lead social stocks across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin shrank 1,900 mt in the week ended March 13 to 35,700 mt, after a decline close to 4,000 mt in the previous week. 

Purchases by downstream lead-acid battery plants were still centred around primary lead as limited supply of feedstock battery scrap restricted the production of secondary lead. It was understood that output of secondary lead in Jiangxi and Anhui failed to meet local demand. 

Smelters made their shipments to the SHFE-listed warehouses this week, before the delivery of the SHFE March contract. This also capped the decline in social inventories of refined lead. 

SMM expects the slide in lead social stocks to narrow further next week as secondary smelters will ramp up production and the increase in demand from lead-acid battery producers will be limited as most producers have normalised operations.