SHANGHAI, May 22 (SMM) – Social inventories of lead ingots in China expanded slightly this week as consumption from the lead-acid battery market barely picked up.
SMM data showed that lead social stocks across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin rose more than 100 mt in the week ended May 22 to 9,500 mt, after a build of 1,400 mt in the previous week.
Supply of secondary lead was stable. This, together with higher lead prices that lifted profits at secondary lead smelters, expanded discounts of secondary refined lead. As of May 22, discounts of secondary refined lead were mostly above 200 yuan/mt against the average price of SMM 1# lead, with some discounts as much as 350 yuan/mt. This drove consumers to secondary lead.
Smelters in Henan, as well as in Jiangxi and Anhui mostly traded under long-term contracts. This prevented the social stocks from rising significantly this week.
Next week, SMM expects the arrival of imported lead to add to the availability in the market and see social inventories of lead slightly higher.
