NEW YORK Lead consumers and sellers have yet to reach
any kind of resolution regarding the pricing structure of 2013
contracts, with market participants reporting that some deals
may be done on a month-by-month basis instead of on an annual
The spot premium continued to trade at a record high range of
14 to 16 cents per pound last week, with traders reporting that
most activity was focused on contract negotiations for
Its been a month since LME Week, so these things
should be getting close to done between now and Thanksgiving
(Nov. 22), one broker said.
The two sides remain divided over how to structure such
amm.com, Oct. 29). Most secondary lead producers
are pushing for a cost-plus system, which would
account for their junk-battery acquisition and processing
costs. Most brokers and consumers still favor a model based on
London Metal Exchange pricing.
I dont think this cost-plus approach will work out
as quickly as the secondaries want, a second broker said.
Our customers are so used to being LME-plus that it will
take a lot of time to train them about this
The ongoing standoff means that some parties may opt for
contracts that dont cover the entirety of 2013.
Some people are talking about going for just parts of
2013, the first broker said.
Either theyll go right to the end of December or
just throw up their hands and do it on a monthly basis, a
third broker said
London Metal Exchange lead prices have increased since mating
season began during LME Week in mid-October.
Three-month lead traded at $2,150.5 per tonne (97.5 cents per
pound) in the official session on the London Metal Exchange
Monday down from $2,119 per tonne Oct. 17.
The recent strengthening of the lead price has lead to the
disappearance of some higher spot premiums, according to the
third broker who previously said hed sold at numbers as
high as 25 cents per pound.
Premiums are not near 25 anymore, theyre 15....15
is the bottom for the market, he said.
Secondary lead producers had argued that a change in the
pricing structure was necessary on account of rising production
costs due to high junk battery prices. In some cases secondary
lead producers costs were exceeding the LME price, market
participants told AMM (
Free market junk lead-acid battery prices dropped to their
lowest level since March last week as demand eased and supply
increased as winter approaches (
amm.com, Nov. 7).