SHANGHAI, Aug 20 (SMM) – Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin increased 4,100 mt from August 13 and rose only 100 mt from August 16 to 198,400 mt as of August 20.
Lead prices fluctuated lower this week, while prices of lead-acid battery scrap stood high amid limited supply and higher transportation costs in the pandemic, so secondary lead prices were close to the costs. Secondary lead smelters held back cargoes, and some small plants in Anhui and Jiangxi reduced production, urging some downstream users with rigid demand to purchase primary lead. The increase in the lead ingot social inventories slowed down.
If lead prices continue to fluctuate at low levels, secondary lead smelters will be hard to regain profits, and the shipments and production will be slowed down simultaneously. The increase in the lead ingot inventories are expected to narrow further.