Multiple Factors Fuel Inventory Growth, Expectations for Production Cuts Restrain Secondary Lead Inventory Buildup Speed [SMM Secondary Lead Inventory Weekly Review]

SMM July 31:

As of July 30, secondary lead finished product inventories stood at 34,000 mt, up about 10,000 mt MoM. Imported crude lead traded in May arrived in a concentrated manner recently after a two-month shipping period, and smelters began refining processing, pushing finished product inventories significantly higher. Meanwhile, the price spread between secondary refined lead and primary lead continued to narrow, and downstream users prioritized purchasing primary lead, with secondary lead transactions remaining weak; compounded by lead prices consolidating on a weak note, smelters were trapped in losses and their willingness to sell proactively was low. SMM expects that secondary lead smelter inventories will stay high next week, but with expectations for industry production cuts, the room for further inventory buildup will be relatively limited.