Lead social inventories fell slower on greater supply of secondary lead

SHANGHAI, Apr 3 (SMM) – Social inventories of lead ingots in China continued to trend downsides this week, but the decline slowed down from a week ago due to rising supplies of secondary lead.

SMM data showed that lead social stocks across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin decreased about 6,500 mt in the week ended April 3 to 11,400 mt. This followed the stocks declined 7,800 mt in the prior week. 

Lead prices hovered around 14,000 yuan/mt this week. Expectations of tax cuts from authorities prompted traders to stockpile. This, coupled with downstream restocking before the Qingming festival holiday, extended the slide in lead social inventories. 

In the second half of this week, the increased supply of secondary lead weighed on premiums of secondary refined lead and drove consumers to the secondary materials. Some quotes of secondary refined lead were heard at flat over the average prices of SMM 1# lead, on an ex-work basis.

SMM expects the decline in lead social inventories to further narrow next week as decent profits will continue to bolster production of secondary lead.