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US lead premiums hold amid weak spot demand

Keywords: Tags  lead, premiums, junk batteries, LME prices, Barbara O'Donovan

NEW YORK — Lead premiums are unchanged as U.S. consumers mostly remain out of the spot market.

AMM’s lead premiums remain in a range of 13 to 15 cents per pound, according to traders, producers and consumers, although some traders reported weak supplies of primary lead.

"We have nothing to sell right now, but we have had a lot of inquiries," one trader said. "Lead and zinc are really hard to come by at the moment." Premiums are unaffected so far due to a lack of fresh demand, he added.

Lead stocks in London Metal Exchange-listed warehouses in the United States totaled 48,775 tonnes March 7. Most of the material—some 46,750 tonnes—is in Detroit, but little is available as the queue for getting metal out of the warehouses is about 550 days (, Feb. 27).

A recent increase in the price of free-market scrap lead batteries, the main raw material used in the production of secondary lead, also has helped premiums remain high. AMM’s junk auto battery price strengthened to 40 to 42 cents per pound in late February from 39 to 41 cents previously (, Feb. 27).

The market for secondary-quality lead is slightly weaker than that of primary lead, according to one market source, who put premiums for secondary material at between 10 and 13 cents per pound. But low lead prices on the LME could provide a boost for demand for primary metal, the market source added.

Three-month lead traded at $2,171 per tonne (98.5 cents per pound) in the LME’s official session Monday, down markedly since January, when three-month metal traded above $2,400 per tonne ($1.09 per pound).

This could mean that people will buy primary lead instead of secondary material, some sources said.

"With the LME prices so low, primary is more competitive than secondary," the market source said.

Domestic premiums for primary lead remain much stronger than those in Europe, where premiums are in a range of $40 to $85 per tonne (1.8 to 3.9 cents per pound).

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