The United States remained the bright spot for the physical trading of lead in the week to Wednesday August 18 amid a massive backwardation, while appetite for zinc was weak in Europe and China, Fastmarkets has heard.
Wide backwardation in lead spread reduces spot trading interest in Asia, USLondon Metal Exchange lead inventory at low level, while Shanghai Futures Exchange lead inventory runs highPoor physical interest in zinc this week sees premiums drop in Antwerp, Shanghai.
Massive backwardation in LME lead spread mutes physical trade
Interest in buying lead metal on the spot market was minimal over the past week, with a dramatic backwardation in the price.
The cash-to-September lead spread was in a $105 per tonne backwardation on August 18. It was even wider for forward contracts, with the three-month spread in a $124.50 per tonne backwardation.
The widening backwardation echoed the low inventory levels of lead on the LME. On-warrant stocks stood at 40,150 tonnes on Wednesday, compared with 80,950 tonnes at the beginning of this year.
Notably, 90-100% of LME cash warrants of lead were held by one party...