The weekly Davis Index for US heavy soft lead rose by 2.2¢/lb to 62.1¢/lb on Wednesday amid increasing demand for the material in both the domestic and export markets.
Automotive factory restarts in mid-May have given way to carmakers ramping up production—thereby raising demand for the material—to make up for time lost to the shutdowns induced by COVID-19. General Motors, for example, announced that it’s returning to a three-shift production schedule this week, while global automakers, like Hyundai, Honda, Mazda, and Volvo, reported higher sales in May than April.
A supply shortage of the material in the Chinese market has prompted buyers in the country to explore importing options. According to some market participants, although demand remains relatively weak in China, tight supply and stock shortages domestically make importing the material a strong possibility.
However, the index for US whole undrained lead batteries remained relatively flat, inching down by 0.3¢/lb to move back to its previous level of 32.5¢/lb delivered US consumer on Wednesday. The index for mixed hard lead also moved within a narrow range to decrease from 57.7¢/lb delivered to 57¢/lb delivered. The Davis Index for lead ingot premium held at 8.9¢/lb delivered consumer.
The official three-month LME lead contract closed Wednesday at $1,718, increasing by $59.5/mt from $1,658.50/mt on May 27. Market participants expect more volatility on the LME as volumes improve.