METALS-Supply worries drive lead prices to highest in over a week

METALS-Supply worries drive lead prices to highest in over a week

March 27, 2020 Off By NAMEX

(Recasts, adds quotes, updates prices)

By Mai Nguyen

SINGAPORE, March 27 (Reuters) – Lead prices rose on Friday to their highest in more than a week, as halting of operations by some suppliers raised worries, while improving demand in China also lent support.

Three-month lead on the London Metal Exchange (LME) rose as much as 1.6% to $1,712 a tonne, its highest since March 17 and on track for its first weekly gain in three weeks.

The most active lead contract on the Shanghai Futures Exchange (ShFE) climbed as high as 13,850 yuan ($1,960.84) a tonne, also the highest since March 17.

Sumitomo Corp will temporarily suspend its San Cristobal silver-zinc-lead mine, while Recylex closed its Weser-Metall lead plant and Trevali halted works at its Caribou zinc-lead-silver mine for now.

Low stocks and better demand in China also supported prices.

“Many secondary lead smelters are still under-utilised now, due to the short supply of battery scraps, while demand has been recovering in recent weeks,” said analyst Dina Yu of CRU Group.

Lead stocks in warehouses tracked by ShFE PB-STX-SGH were at a 4-1/2-month low by the end-last week at 22,514 tonnes while inventories in LME-approved warehouses MPBSTX-TOTAL fell to 55,700 tonnes, their lowest since March 10, latest data showed.

Market sentiment was also supported by hopes of further stimulus by major countries to cushion the economic fallout from the pandemic.

However, it is unclear how long the price rally can last as demand from end-users is seen weak while secondary lead smelters are increasing output, Yu said.


* PRICES: LME copper rose 0.7% to $4,836 a tonne by 0435 GMT, LME aluminium rose 1.1% to $1,552.50 a tonne while ShFE copper was flat at 39,080 yuan a tonne and ShFE zinc climbed 2.1% to 15,245 yuan a tonne.

* COPPER: South Africa’s main export terminals closure to contain the outbreak would disrupt copper supplies from the Democratic Republic of Congo and Zambia.

* GLENCORE: Glencore PLC halted a number of smaller mines but added its larger operations were not materially impacted.

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Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 7.0633 Chinese yuan renminbi) (Reporting by Mai Nguyen; Editing by Devika Syamnath and Shailesh Kuber)