According to an SMM survey, as of August 5, the total social inventory of lead in five major regions was 37,400 mt, a decrease of 4,800 mt compared to July 29 and a decrease of 2,300 mt compared to August 1.
According to the survey, since last Friday, lead prices have dropped significantly, with the most-traded SHFE lead contract continuously falling below 18,500 and 18,000 yuan/mt, and today it is approaching the 17,500 yuan/mt mark. The sentiment in the lead market has led sellers to actively offload stocks. For example, the quotation for imported lead was at a discount of 100 yuan/mt to the most-traded SHFE lead 2409 contract. Downstream producers purchased as needed at low prices, causing inventory in some warehouses to decline. With the continued decline in lead prices, secondary lead smelters have collectively lowered the purchase prices for battery scrap. To avoid risks, battery scrap traders have suspended purchases, resulting in a significant reduction in low-price battery scrap arrivals at smelters. Without the replenishment of low-price battery scrap to balance the previous high-cost inventory, the losses for secondary lead producers will expand. The circulation of secondary lead in the market is expected to decrease, potentially driving downstream demand back to the primary lead market.
