【SMM Analysis: Price Spread Advantage Shifts Consumption Towards Primary Lead, Further Reducing Social Inventory】

SMM April 21 News: According to SMM, as of April 21, the total social inventory of SMM lead ingots in five regions stood at 54,600 mt, a decrease of 12,000 mt compared to April 14, and a reduction of 8,300 mt from April 14.
Recently, lead prices have held up well, with suppliers actively selling. The ex-factory quotations for primary lead in mainstream production areas were at a discount of 100-0 yuan/mt against the SHFE 2505 contract. The relatively narrow spread between futures and spot prices does not favor transferring to delivery warehouses, leading suppliers to prefer ex-factory cargo pick-up, resulting in reduced arrivals at social warehouses in the short term. Meanwhile, the previous round of lead ingot delivery cargoes has re-entered the market, prompting downstream enterprises to opt for nearby procurement, with noticeable reductions in social warehouse inventories in the Jiangsu-Zhejiang-Tianjin region. Additionally, the continuous rise in scrap battery prices has left secondary lead enterprises in a loss-making position. In some regions, the ex-factory quotations for secondary refined lead are at parity with the SMM 1# lead average price, further driving downstream just-in-time procurement towards primary lead.