Social inventories of lead ingots extended declines due to primary smelter maintenance

SHANGHAI, Jul 24 (SMM) –Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin shrank 4,400 mt from a week ago to 37,700 mt as of July 31, showed SMM data.

Primary lead smelters in Henan were under maintenance this week, lowering spot cargoes circulating in markets. Discounts of secondary lead narrowed further at the start of the week, with secondary refined lead offered at a discount of 100 yuan/mt against the average price of SMM 1# lead.

Sellers continued to discharge cargoes as lead prices extended gains, with domestic common lead brands offered at flat over the SHFE 2008 lead contract. Downstream buyers restocked as required, lowering social inventories of lead ingots.

SMM expects lead social inventories to dip next week as the prospect of a high consumption season of lead-acid batteries and recovered profits are likely to encourage some secondary lead smelters to further ramp up production while some primary lead smelters will remain under maintenance.