There is already a large amount of lead. Stocks of the battery metal at the London Metal Exchange (LME) jumped 58% in just two days earlier this week, thanks to the warranting of 171,175 metric tonnes in Singapore warehouses.

The exchange should be pleased. It cut listing fees for small lead producers between April 2024 and December 2025 to "boost liquidity" in its lead contracts. The move has clearly paid off.

LME lead stocks have grown to nearly 500,000 tonnes in recent months, including large amounts stored outside warrant. The metal, which is no longer in demand, has become a preferred financing tool, with most stocks in Singapore, moving between warehouses in search of better lease deals.

The wave of warranting activity this week is the latest, and largest, in this process. But where did all this metal come from? And how much is expected?

Warehouse roulette

LME lead stocks have seen large and intensive waves of warranting activity for several months. This trading is based on warehouse market arbitrage rather than on lead market fundamentals.

A trader, in this case Trafigura, puts a large amount of metal into LME warrants, agreeing with the warehouse operator to share the future rent fees that the new owner will pay.

The new owner is likely to quickly cancel the warrants to avoid the lease deal and move the metal to another storage company. The resulting stock volatility has been a hallmark of the LME aluminium market, but stocks of that light metal have fallen below 400,000 tonnes, including off-warrant stocks. The focus has shifted to lead.

Some of what 'arrived' this week was simply moved from off-warrant stocks. Stocks in Singapore fell by 34,256 tonnes on Monday, when the first batch of metal, 83,225 tonnes, was warranted. However, there was still 142,598 tonnes of warrantable metal before the second round of deliveries on Tuesday.

Rise in Indian exports

Indian brand lead accounted for 76% of total LME warrant stocks at end-June. Until January 2023, there was no Indian metal in the market.

Indian exports have risen from 151,000 tonnes in 2022 to 482,000 tonnes last year, according to the World Bureau of Metal Statistics, which compiles trade data from official customs figures.

Singapore is a major export destination, even though it is not a major lead-acid battery manufacturing hub, the primary use for the metal.

Shipments to Singapore have exceeded 400,000 tonnes since the start of 2023, peaking at 31,000 tonnes in November 2025, accounting for nearly half of India's total refined lead exports.

Until last year, there were only three registered lead brands on the LME, two from Hindustan Zinc, a large primary production and mining and refining company, and one from Jain Recycling of Resources, a secondary producer.

Five more brands were added last year, representing total annual production capacity of 195,000 tonnes, as part of the LME's efforts to attract smaller secondary lead producers to list. Gravita India, with an annual capacity of 48,000 tonnes, became the ninth Indian lead brand eligible for LME delivery.

Change in flow

The growing number of Indian producers registered on the exchange increases the likelihood of more lead flowing to LME warehouses in Singapore.

But Indian trade patterns have seen a shift this year. Exports to Singapore were only 1,555 tonnes in April, the lowest monthly level in a year, according to LME Material Management System data. China was the main destination that month, with shipments of 8,685 tonnes, accounting for 34% of April's total exports.

This is an entirely new market for Indian metal. China did not import large amounts of refined lead last year, with imports from India limited to just 500 tonnes. But its imports from India have risen sharply to 57,000 tonnes in the first five months of this year, bringing total imports to 132,000 tonnes, the highest annual figure since 2009.

The reason for China's sudden need for such large amounts of lead remains unclear, but as this demand increases, the amount of Indian metal heading to LME warehouses in Singapore decreases. This, of course, still leaves large amounts of metal circulating through warehouse deals in Singapore.

This sudden appearance of large quantities of lead has pushed the LME three-month lead price to a 15-month low, reaching $1,840 per tonne this week. Chances of a sustained recovery depend on how long China continues to divert Indian metal flows away from LME warehouses in Singapore.

Economic columnist for Reuters