Lead premiums dropped for a second month in Europe as battery demand slowed, according to three traders with direct knowledge of the market.
The fee for lead at Rotterdam is $72.50 a metric ton, the midpoint of estimates provided by the three traders, who asked not to be identified because they’re not authorized to speak to the media. The fee is added to the price of metal for immediate delivery on the London Metal Exchange. It was $80 a ton in February and $90 a ton in January.
“The lead market is seasonally moving into a weaker period,” Leon Westgate, an analyst at Standard Bank Plc in London, said by phone today. “It happens every year.”
Lead prices have dropped 6.7 percent this year on the LME. Lead-acid batteries account for 85 percent of global demand, according to CHR Metals Ltd., a lead and zinc consulting company in Godalming, England. Downward pressure is developing in the physical market, Duncan Hobbs, an analyst at Macquarie Group Ltd., said at Metal Bulletin’s conference in Istanbul yesterday.
The premium is for lead that is of 99.97 percent purity, and doesn’t include delivery costs. For metal that is 99.99 percent pure, used in radiation shields, the premium is 190 euros ($246) a ton, according to three other traders with direct knowledge of the market. That includes delivery costs in Europe.
Glencore International Plc (GLEN) resumed output at its Portovesme lead smelter on the Italian island of Sardinia, a person familiar with the matter said last month. Deliveries are expected to start in April and production this year will be about 60,000 tons, the person said this week.
Premiums are the midpoint of estimates. For Rotterdam, the range was $55 to $90 a ton, compared with $70 to $90 a ton in February and $80 to $100 in January. The range for the 99.99 percent purity lead was 180 euros to 200 euros.
Lead stockpiles in LME-tracked warehouses in Europe are up 2.6 percent this month, data showed today. Antwerp, the world’s biggest LME lead repository, holds 54 percent of inventory in the region. About 90 percent of stockpiles at the location await delivery. The Dutch port of Vlissingen holds 37 percent of European lead stockpiles.
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