Global lead short-term outlook March 2024

Lead markets have witnessed ostensibly bearish developments in March. LME stocks rose by 89 kt Pb to 268 kt during the month, with Singapore sheds taking just about all of it. This closed the previously prevailing LME Cash/3-month backwardation and generated a decisive contango. The 4% fall in LME Cash made lead the worst performer aside from nickel. Much of the rise in LME stocks reflects tonnage that was previously reported to be off warrant, and customs data has made no secret of the volume of lead being exported to Singapore. We believe that the best part of 100 kt Pb is Indian. Despite exporting more than 400 kt Pb since mid-2021, Chinese tonnage in the LME may be nearer just 50 kt Pb. While there is no doubt that there isn't a dearth of lead, today's stocks may not be that much higher than they have been since 2021. China's exports coincided with falling SHFE stocks and the ROW market would have been much tighter without them. And Chinese exports dried up in January-February.