Global lead short-term outlook August 2023

While lead's performance marked it out among LME metals in August, its strength hasn't been shared equally in China and the ROW. The LME/SHFE arbitrage therefore widened towards its level in June that prompted a spike in refined exports from China that spilled over into July. SHFE stocks have continued to recover despite those exports, which appear to have been easily accommodated in the ROW market which has suffered primary smelter production shortfalls in the first half of the year. Prevailing concentrate market tightness means that mounting mine supply losses should continue to dictate primary smelter output until curtailments are reversed and other mines start supplying too. Meanwhile, as OEM demand shows signs of weakness, the importance of the automotive replacement battery sector and growth in non motive standby applications explains much of lead's relative resilience compared with other metals .