Lead Rises in LondonLead Rises in London on Indications China's Imports May Expand
By Chanyaporn Chanjaroen
July 28 (Bloomberg) -- Lead rose the most in more than two weeks in London on indications that China, the world's largest producer and user of the metal, may import more.
Stockpiles of lead in Singapore warehouses monitored by the London Metal Exchange have fallen 32 percent since June. Canceled warrants, or the amount earmarked for withdrawal, jumped 36 percent, according to the exchange's report today. Singapore is the nearest exchange warehouse location for China for lead.
China's ``domestic lead demand has remained strong in 2008,'' Jim Lennon and Adam Rowley, analysts at Macquarie Group Ltd. in London, said in a report today. ``A large increase in LME-canceled warrants in Singapore was reportedly due to market participants looking to move metal from the LME to China, selling the material for a profit.''
Lead for delivery in three months increased as much as $119, or 5.6 percent, to $2,234 a metric ton as of 4:30 p.m. on the LME, the biggest intraday gain since July 10. The contract has increased 24 percent this month. Still, it's the third-worst performer this year among the six main metals traded on the bourse, behind nickel and zinc.
The advance of lead, mostly used in car batteries, has narrowed a gap between international and Chinese prices, and may encourage more exports from the world's most-populous nation, Lennon and Rowley said in the report. China's lead imports dropped 62 percent to 1,925 tons in June from a year ago.
Total LME lead inventories fell 0.6 percent to 90,725 tons.
Canceled warrants in Long Beach, California, increased to 3,350 tons as of today, from none on July 9. A July 3 fire at Quemetco Inc.'s lead recycling plant in California halted production, according to a monthly report by Fortis. It has an annual capacity of 120,000 tons, the report said.
Copper Stockpiles
Copper stockpiles monitored by the exchange gained 2,575 tons, or 1.9 percent, to 136,050 tons, the highest since March 5. The three-month copper contract rose $23, or 0.3 percent, to $7,979 a ton.
Hedge-fund managers and other large speculators cut their net-long position in New York copper futures by 67 percent in the week ended July 22, according to U.S. Commodity Futures Trading Commission data. A long position is a bet on price increases.
Nickel stockpiles rose 978 tons, or 2.3 percent, to 44,358 tons, the biggest one-day increase since April 7, according to LME data. The benchmark contract advanced $300, or 0.5 percent, to $18,750 a ton.
World stockpiles of unwrought aluminum, or metal not processed into products, fell to 1.56 million tons in June, 7 percent from 1.68 million tons in May, the London-based International Aluminium Institute said today on its Web site.
Total inventories, which include those from scrap yards and mill products, were 2.82 million tons, down from 2.94 million tons in May.
Aluminum increased $40.50, or 1.4 percent, to $3,010 a ton.
Among other LME-traded metals, zinc added $70, or 3.8 percent, to $1,915. Tin increased $200, or 0.9 percent, to $22,550.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
Last Updated: July 28, 2008 12:21 EDT