According to SMM survey, the lead ingot social inventory across five major regions in China totalled 70,500 mt as of January 12, up 3,400 mt from January 5 and 4,400 mt from January 8.
Some primary lead smelters recovered after maintenance last week. Anhui's secondary lead smelters resumed normal production after the end of production restrictions due to the haze. The supply of ingots grew. In terms of lead consumption, against rising lead prices, downstream companies were actively purchasing on demand, preferring supply from smelters. That caused some smelters to run out of lead ingot inventory and pre-sold cargoes. As the price spread between futures contracts and spot cargoes expanded, some sellers delivered cargoes to SHFE warehouses for delivery. This, combined with the deliveries for the 2401 contract, led to increase in social inventories last week. The production restrictions in Anhui still linger, and we need to continue to pay attention to the impact on the production of smelters this week.
