Suppliers prudent to raise lead ingot prices on the Chinese market
2014-07-28 11:54:10 [Print]
BEIJING (Asian Metal) 28 Jul 14 - The lead futures soared strongly by RMB565/t (USD93/t) to RMB14,800/t (USD2,426/t) on the SHFE last Friday, but most suppliers were very prudent to raise offers for lead ingot 99.994%min on the spot market, due to the sluggish lead acid battery market.
A source from a Henan-based major lead smelter reported that although lead futures appeared very strong, the lead ingot prices did not increase so much on the spot market, due to the weak demand from battery producers. “Lead ingot prices only increased by around RMB100/t (USD16/t) to RMB14,050/t (USD2,303/t) ex works on Friday,” said the source, disclosing that as lead futures increased strongly, the buying interest recovered on the spot market.
The company sold around 1,000t of lead ingots on the spot market on Friday, up from about 300-400tpd in the past days.
The source commented that as the lead acid battery market remains very sluggish and there are large inventories held by battery producers and traders, the demand for lead ingot is weak. Therefore, he predicted that lead ingot prices may lack the momentum to rise strongly in the near term.
The smelter is operating fully based on its production capacity of 200,000tpy and holds around 6,000t of the metal in stock.
A source from a Yunnan-based lead smelter reported that lead ingot prices increased by around RMB100/t (USD16/t) to RMB13,800/t (USD2,262/t) ex works last Friday. “Although lead futures rose strongly on the SHFE, we did not raise offers sharply, fearing the demand for lead ingot may weaken further,” said the source . “After lead ingot prices increased, the trading quieted down on the spot market . Many buyers preferred to watch the market now.”
The smelter is operating with around 2,000t of lead ingots per month, based on its full production capacity of 100,000tpy. It holds around 1,000t of the metal in stock.
The source predicted that dragged down by the sluggish demand from lead acid battery producers, there will be limited room for lead ingot prices to rise in the near term.