Frequent Smog-Related Production Restrictions Lead to Nearly 20,000 mt Weekly Decline in Lead Ingot Social Inventory [SMM Survey]

According to an SMM survey, as of November 21, the total social inventory of lead ingots in five regions tracked by SMM stood at 64,400 mt, a decrease of 19,900 mt compared to November 14, and a decrease of 20,600 mt compared to November 18.

The survey indicated that since mid-October, heating has gradually started in northern regions, leading to recurring air pollution issues. As of November 20, regions such as Hebei, Henan, and Anhui had issued their third smog warnings, once again impacting the production of secondary refined lead at smelters. The production restrictions resulted in a reduced supply of secondary refined lead in the market, with smelters maintaining firm ex-factory prices, quoted at premiums of 0-150 yuan/mt against the SMM 1# lead average price. This situation caused downstream enterprises to prefer primary lead for their immediate needs. This week, delivery supplies re-entered the market, and downstream enterprises purchased as needed, leading to a nearly 20,000 mt weekly decline in lead ingot social inventory. Next week, we need to monitor the lifting of production restrictions on lead smelters in smog-affected areas.