SHANGHAI, August 28 (SMM) – Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin dipped 700 mt from the prior week to 36,400 mt in the week ended August 28.
Discounts of secondary lead expanded at the start of the week, once expanding to 400-450 yuan/mt, ex-works, against the average price of SMM 1# lead, but narrowed later in the week as firm battery scrap prices drove profits of secondary lead smelters to negative territory and dampened their enthusiasm for production. Secondary refined lead was offered at discounts of 250-350 yuan/mt (ex-factory) over the average price of SMM 1# lead as of Friday August 28. This drove downstream users to primary lead, slightly lowering lead ingots inventories.
Social inventories are expected to hold stable next week as production losses may slow resumption at Guizhou secondary lead smelters while primary lead output is likely to increase.