SHANGHAI, Oct 25 (SMM) – Social inventories of lead ingots in China dipped this week, showed an SMM survey, as downstream consumers stockpiled after prices slipped to 16,650 yuan/mt.
As of October 25, lead social stocks across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin decreased by over 200 mt from a week earlier to 20,800 mt.
Downstream consumers favoured secondary lead from smelters earlier in the week, as their discounts against the average of SMM 1# lead widened to 600-400 yuan/mt on an ex-factory basis. Quotes for primary lead from traders remained in a discount of 50-20 yuan/mt against the Shanghai Futures Exchange lead contract for November delivery.
Lead social inventories are likely to extend their gains next week, as the recent maintenance at smelters in Henan has limitedly affected production and as inventories at some smelters have risen with lower lead prices deterring smelters from selling.