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SHANGHAI LEAD & ZINC: China lead market braced for a slump

May 27, 2011 - 08:15 GMT Location: Shanghai

KEYWORDS: China Lead and Zinc Conference , China , Shanghai Metals Market

China's lead demand could slow down in coming months with battery maufacturers hit by an environmental crackdown and car sale subsidies due to end by June, said delegates at the Shanghai Metals Market (SMM) Lead and Zinc Summit

The pullback would coincide with rising lead inventories, particularly as some end users moved to stockpile ahead of the launch of lead contracts on the Shanghai Futures Exchange (SHFE) on March 24. "We expect short-term weakness in lead due to perceptions of slowing industrial demand," Edward Meir, senior analyst at MF Global, agreed. So far, authorities have shut down about 80% of the battery manufacturers in the eastern coastal province of Zhejiang, according to Zhang Shu, an SMM analyst. The crackdown was sparked off by a pollution scandal in Zhejiang in March and scrutiny has since spread to Jiangsu, Shandong and Guangdong, which together with Zhejiang, manufacture more than half of the country's lead batteries. Fear of failing the...

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