Commodity Market Report
Global lead short-term outlook April 2024
Report summary
China exported 183 kt of metal in 2023 to mainly Asian destinations, displacing other suppliers and generating a surplus in the ROW. LME warranting has made this more visible, particularly in Singapore since late 2023, and 97% of the LME's current 270 kt stock is in Asian sheds. While this stock is perturbing, we view it against subsequent developments in China's trade for context. Exports have been minimal so far in 2024, down by an annualised 146 kt. This represents a significant cut to supply in the ROW and is therefore supportive for metal prices. LME Cash is up 8% from the start of April alongside a surge in warrant cancellations. Cancelled warrants are up ~1,000%, with their share rising to 42% of total stocks from 4% at the start of April. The open LME tonnage is therefore now at its lowest level since January. Q2 is a seasonally weak period for metal prices, but raw material availability is constraining supply. This is supporting Chinese prices which is capping the arbitrage.
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