SHANGHAI, Apr 24 (SMM) – Social inventories of lead ingots in China further declined this week after the stocks halted their seven consecutive weeks of decline over the previous week.
SMM data showed that lead social stocks across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin fell 1,250 mt from a week ago to 8,700 mt as of April 24.
Before the five-day Labour Day holidays which begins on May 1, lead-acid battery producers that planned to maintain operations restocked raw materials this week. Lead inventories at smelters were at low levels and social stocks have been replenished on a limited basis.
Thin profits of secondary lead prevented the discounts of secondary refined lead from widening. This drove downstream consumers to purchase from the social warehouses nearby instead from secondary lead smelters. As of April 24, discounts of secondary refined lead stabilised from the prior week at 100-0 yuan/mt against the average prices of SMM 1# lead on an ex-work basis.
SMM expects the decline in social inventories of lead ingots to slow next week as downstream buyers will finish their pre-holiday stockpiling. Smelters will continue their delivery under long-term contracts and keep inventories at low levels.