China’s exports of refined lead hit a 15-month high in September with year-to-date shipments already exceeding last year’s total.
However, the transfer of surplus metal from east to west is preventing a rebuild of stocks in Shanghai, where the lead market is also still gripped by tightness.China exported 35,400 metric tons of refined lead in September, which was the highest monthly tally since June of last year. Much of that physical tightness has since abated, particularly in Europe where the Stolberg smelter in Germany restarted in April after two years of flood repairs.The top two destinations for Chinese lead last month were Taiwan and South Korea to the tune of 16,400 and 12,800 metric tons respectively.The relocation of stocks from China to the West has seen LME stocks rebuild from their depleted year-start levels.
Over half of LME stocks were either Chinese or Taiwanese metal at the end of last month, compared with under a third at the start of the year. The cost of rolling a short position overnight, the LME’s “tom-next” spread, traded as wide as $10 per metric ton on both Monday and Tuesday, attesting to the pressure on the cash date.
Clearly there is something of a long-short battle playing out in the London lead market, where the outright price has been under pressure.
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