SHANGHAI, Jun 12 (SMM) – Social inventories of lead ingots in China nearly doubled this week, as demand faltered further in the run up to mid-year while inflows increased on the approaching delivery of the SHFE June futures contract and greater arrivals of seaborne cargoes.
SMM data showed that lead social stocks across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin increased 10,100 mt in the week ended June 12 to 24,500 mt, after a build of 2,800 mt in the previous week.
Large lead-acid battery producers began to trim production to lower inventories as consumption remained sluggish and given the approach mid-year—a timing for financial settlement.
Domestic smelters, of both primary and secondary lead, meanwhile, maintained stable production, and cargoes were shipped to SHFE warehouses for the delivery of the June contract which will expire on Monday June 15.
As the mid-year approaches, smelters will continue to deliver cargoes to social warehouses to recover funds, while downstream consumers will remain cautious about lead procurement, which will extend the increase in lead social inventories in China.
