LME lead stocks churn masks battery metal growing surplus
LONDON, Nov 26 (Reuters) – The queue to load lead out of London Metal Exchange (LME) warehouses in Singapore stretched to 95 days at the end of October.
In the looking-glass world of LME warehousing, such a long wait to access stocks is not an indicator of a sudden demand rush but rather of chronic oversupply.
LME-registered lead stocks are the highest they’ve been in over a decade and traders have for months been tussling for units to lock into lucrative storage deals.
Warehousing the battery metal is currently more profitable than actually delivering it into the physical supply chain.
The resulting churn of metal between warehouse operators can generate a lot of noise but the underlying signal is of a metal accumulating ever more surplus.
HEAVY METAL CAROUSEL
LME lead inventory has been stored almost exclusively in Singapore for the last couple of years, much of it at warehouses owned by Grafton Logistics Services.
Grafton, which has recently sold its Singapore operations to trading giant Trafigura, has had lead-specific load-out queues before, once in April 2024 and again in April 2025.
Such “flash” queues tell of the stocks carousel that has been taking place in the city-state. Over 800,000 metric tons of lead have been delivered in and out of LME warehouses in Singapore since the start of the year for a net decline of 15,700 tons.
The scale of the churn has steadily increased to the point that October 9 brought a massive 117,900 tons of cancellations as metal was prepared for load-out.
The driver of this heavy metal roundabout is the LME rent-share storage deal, which allows traders delivering metal into the LME system to take a share of future rental revenue as long as the metal stays in that warehouse.
Unsurprisingly, the buyer of the metal often opts to escape that deal by cancelling the metal, loading it out and delivering it to another warehouse company, locking in a new rent-share deal.
LME storage in Singapore can cost as much as 51 U.S. cents per ton per day, which is why warehouse arbitrage can be a money-spinner for all involved.
Unusually, the most recent spate of deliveries on November 14 included 42,025 tons at the Taiwanese port of Kaohsiung rather than Singapore. It won’t be there for long though. It’s already all been cancelled in preparation for load-out.
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LME lead stocks churn masks battery metal growing surplus, source
