Restricted supply lowered lead social inventories from pre-holiday

SHANGHAI, Oct 12 (SMM) – Social inventories of refined lead in China were lower after the National Day holiday, marking the ninth consecutive week of decline as of October 11, as environmental issues capped the supply of primary and secondary lead. 

SMM data showed that lead social stocks across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin were 900 mt lower from September 27, and 160 mt lower from October 8, standing at 18,000 mt as of October 11. 

Anti-smog initiatives in late September deterred production at primary and secondary lead smelters in Henan and Hebei provinces. This drove downstream consumers to deplete inventories in the trading market. Traffic restrictions during the National Day parade also kept deliveries from entering social warehouses. 

In the first week after the holidays, lead-acid battery producers restocked cautiously in light of remaining stockpiles and lower lead prices. Continued rectifications at secondary lead smelters in Taihe of Anhui province affected supplies in nearby Jiangsu and Zhejiang. These kept social inventories as of Friday slightly lower from the start of the week.

Inventories at smelters are expected be transferred to social warehouses in the weeks ahead as primary smelters resume operations from maintenance and the delivery of futures contract which is due next week.