SMM Lead Ingot Social Inventory: Regional Supply Reduction of Primary and Secondary Lead, Social Inventory Turns from Increase to Decrease

SMM reported on March 24 that as of March 24, the total social inventory of SMM lead ingots in five locations was 71,900 mt, an increase of over one hundred mt compared to March 17; a decrease of 2,100 mt compared to March 20.

Recently, smelters in Henan entered maintenance, and some smelters in Hunan cut production due to insufficient raw materials, leading to a temporary reduction in lead ingot supply. Spot lead was generally sold at a premium of 50-100 yuan/mt against the SMM 1# lead average price. Meanwhile, with a significant drop in lead prices, smelting profits shrank, especially as scrap battery prices remained high. The profit margins of secondary lead enterprises approached the cost line, and some key production areas saw minor production cuts. The regional price spread of secondary refined lead expanded, and in regions with low inventory, the discount of secondary refined lead narrowed, to 50-0 yuan/mt ex-factory against the SMM 1# lead price. After the decline in lead prices, downstream enterprises maintained just-in-time procurement, and the willingness to buy the dip improved. Some turned to receiving goods from delivery warehouses, causing the social inventory of lead ingots to turn from an increase to a decrease.