Lead social stocks further built amid subdued consumption

SHANGHAI, Jun 5 (SMM) – Social inventories of lead ingots in China extended their increase this week, driven by weak consumption from the lead-acid battery market, continued arrivals of imported lead and ample supply of secondary lead. 

SMM data showed that lead social stocks across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin rose 2,800 mt in the week ended June 5 to 14,400 mt, after a build of over 2,000 mt in the previous week.

Sluggish lead-acid battery demand drove some battery companies to plan for output cut this month. A rise in lead prices at the start of the week also sidelined lead-acid battery producers and this drove up inventories at primary lead smelters. Smelters were more willing to deliver SHFE-registered brands, which saw some lead ingots inventories transferring from smelters to social warehouses this week.

With the approaching of the delivery day, SMM expects social inventories of lead ingots to further rise next week as primary and secondary smelters maintain normal production while the strength in consumption is limited.