Fastmarkets analyst James Moore and reporter Yasemin Esmen size up the lead market ahead of LME Week, which begins Monday October 11.
Ambitious expansion of secondary lead capacity and strong tolling activity at Chinese smelters have driven a rapid increase of lead inventories in China. And SHFE warehouse stocks have surged to record levels, going above 200,000 tonnes this year.High shipping costs and container shortages have kept this surplus locked in China at a time when rising seasonal demand and smelter disruptions have created tight availability elsewhere. This is clear from physical premiums in the US having risen to multi-year highs and lead stocks in the LME warehouse network having dropped to 12-year lows.Looking ahead, our global supply-demand model implies the refined lead market fundamentals will gradually rebalance during 2022, after the modest surplus that accumulated in China this year. This rebalancing is premised on...