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.
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 US 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.
Beyond the noise
The Singapore roundabout serves to confuse any LME stocks price signals.
A way of cutting through the headline noise is to look at both LME-registered inventory and LME off-warrant inventory, which is the dark side of the carousel.
Combined on- and off-warrant LME lead stocks have risen from just 21,500 tons at the start of 2023 to over 404,000 tons. There has been a 71,000-ton mini surge since the start of September, coinciding with accelerated Singaporean imports of refined lead from India.
The LME only introduced its off-warrant stocks reports in 2020 so any direct historical comparison is impossible but the record high in registered-only lead stocks was 388,500 tons in 2011.
One of the LME’s core functions is the financing and storage of surplus metal and both can be actively traded in ingenious ways such as rent-sharing agreements.
The whole thing, though, is predicated on there being a lot of surplus metal around to play with. These warehouse strategies were developed in the LME aluminum market, which has historically carried very high stocks.
Lead mountain
The mountain of lead in LME warehouses aligns with the International Lead and Zinc Study Group’s assessment that the global refined lead market has registered only one year of supply deficit since the start of the decade.
That was in 2022, when multiple smelter outages caused global refined lead production to contract by 1.7% and LME stocks to end the year at just 25,150 tons.
Since then lead supply has exceeded demand to the tune of 231,000 tons over 2023 and 2024 and another 32,000 tons in the first nine months of this year.
The Study Group’s most recent forecast in October was for more of the same next year with a projected 102,000-ton supply surplus.
Given the weight of stocks on the market, it’s hardly surprising that LME three-month lead has spent most of the year locked in a $1,900-2,100 per ton range, with the exception of a brief dip to the year’s low of $1,837.50 in April at the time of the broader “Liberation Day” market meltdown.
There has arguably been more action in the time-spreads, which contracted sharply in May and again in October as traders and banks arm-wrestled for available lead stocks to finance and store.
The latest battle seems to be over with the benchmark cash-to-three-months period easing sharply from a contango of $11 per ton at the start of the month to $36 per ton.
That probably means more busy times ahead for Singapore stevedores as they move pallets of refined lead around the city’s warehousing zone.
(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)
(Editing by Tomasz Janowski)