SMM Analysis: Significant Phase Reduction in Lead Consumption, Social Inventory Surpasses 70,000 mt Again

SMM, March 31: According to SMM, as of March 31, the total social inventory of lead ingots in five regions reached 72,500 mt, an increase of over 600 mt compared to March 24, and a rise of 3,300 mt compared to March 27.
Recently, both supply and demand in the lead market have declined. Due to factors such as routine maintenance and difficulties in scrap recycling, production cuts have been observed in both primary and secondary lead smelters. As the traditional off-season for the lead-acid battery market approaches, downstream enterprises are exercising caution in production, with some reducing output or taking holidays. Meanwhile, after a surge last week, lead prices pulled back, leading to a strong wait-and-see sentiment among downstream enterprises. Some have even temporarily halted long-term contract purchases, resulting in a noticeable phase reduction in procurement. This has prompted suppliers to transfer lead ingots from in-plant inventory to social warehouses, causing social inventory to surpass 70,000 mt again. Additionally, after the decline in lead prices, profits from secondary lead have rapidly shrunk, dampening the production enthusiasm of some smelters. As April approaches, the delivery of the SHFE lead 2504 contract is on the agenda, with attention focused on the movements of delivery brand sources being transferred to delivery warehouses.