Japan Zn, Pb Prices Surge under Supply Shortage after Quake

Japanese zinc and lead ingot market prices are surging for stock sales of the dealers when the major smelters stopped the operation the major earthquake. Some dealers’ selling prices are more than 15 yen per kilogram higher than domestic official selling prices of the smelters while the dealers’ selling prices are normally lower than official prices. Zinc and lead users try to secure the metals more than usual expecting tighter supply.

The buyers increase zinc order to the dealers when major smelters stopped the operations after the quake. A dealer said major part of the order is to build inventory. The dealers reject some of the spot order from new comers for stable supply.

The dealers’ zinc ingot selling price is normally 10-15 yen per kg lower than domestic official selling price. However, the dealers’ selling price gets higher than official selling price due to the speculative buying.

The lead ingot supply is tighter than zinc supply when the buyers secure the metal as much as possible and the dealers’ inventory gets very low. Some dealers’ lead ingot selling price is higher than domestic official selling price of 269 yen per kg while the dealers selling price is normally 7-10 yen lower than the official price.

However, the lead ingot supply would increase when Toho Zinc will finish maintenance outage at its domestic largest refinery in Hiroshima this week. The lead demand would decrease when battery output is likely to decrease under automobile output reduction.

The zinc ingot supply would also increase when imported zinc ingot is arriving in Japan and the zinc demand would decrease due to automotive galvanized steel output cut.