(Updates with official prices)
By Peter Hobson
LONDON, Nov 6 (Reuters) - Lead prices fell on Wednesday as rising stockpiles in China and falling premiums for nearby material on the London Metal Exchange (LME) pointed to a better supplied market.
Benchmark lead on the LME did not trade in official rings but was bid down 1% at $2,130 a tonne after touching $2,126.50, the lowest since Oct. 15.
A deficit and dwindling stockpiles had pushed the metal - which is used in batteries - up around 25% to a 15-month high of $2,265.15 last month.
But recycled output is rising in China, the biggest producer, and demand is weak with a U.S.-China trade war slowing economic growth, said CRU analyst Dina Yu.
The most traded lead contract on the Shanghai Futures Exchange <ShFE) has tumbled to its lowest since July,
That is pulling down LME prices, said ING analyst Wenyu Yao, predicting that prices will average $1,965 a tonne next year.
STOCKS: Lead inventories in ShFE warehouses have ticked up to 21,411 tonnes from around 15,500 a month ago. PB-STX-SGH
Headline stockpiles in LME-registered warehouses at 70,000 tonnes are also up from 10-year lows around 55,000 tonnes in July, MPBSTX-TOTAL
SPREAD: The premium for cash lead over the three-month contract on the LME has fallen to $5.75 from around $20 a week ago, suggesting the market for nearby metal has loosened. MPB0-3
WARRANTS: However, one entity holds more than 90% of LME lead warrants, raising concerns over availability. <0#LME-WHL>
LEAD FUNDAMENTALS: The roughly 12-million tonne global lead market will switch to a 55,000-tonne surplus in 2020 from a deficit of 46,000 tonnes this year, the International Lead and Zinc Study Group (ILZSG) said last week.
TRADE WAR: The United States and China are working to narrow their differences enough to sign a “phase one” trade deal as early as this month.
EUROPE ECONOMY: German industrial orders and euro zone business activity performed slightly better than expected, but the outlook remains poor.
CHINA SCRAP: China issued a sixth batch of quotas for imports of restricted types of scrap metal, including for 11,110 tonnes of high-grade copper scrap.
ALUMINIUM: Benchmark aluminium traded down 0.1% at $1,809 a tonne as the cash LME contract flipped to a premium against three-month metal for the first time since January 2018, indicating tighter nearby supply. MAL0-3
NICKEL: Indonesia may decide on Thursday whether to allow a resumption of nickel ore exports after halting shipments to carry out an investigation into violations of export rules, a mining ministry official said.
OTHER METALS: LME copper traded down 0.2% at $5,931 a tonne, zinc was bid 0.7% lower at $2,481 and tin was bid down 0.2% at $16,425. Nickel traded 0.3% higher at $16,325.
Reporting by Peter Hobson, additional reporting by Mai Nguyen; Editing by Emelia Sithole-Matarise/Mark Heinrich