SHANGHAI, September 30 (SMM) – Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin decreased 9,700 mt from September 24 and fell 9,700 mt from September 27 to 206,200 mt as of September 30.
According to SMM survey, the primary and secondary lead smelters generally reduced production due to the losses or power rationing, and the tighter supply prompted the smelters to hold prices high. The quotations for the small orders of the primary lead stood at premiums of 0-200 yuan/mt (ex-factory) over the average SMM #1 lead price. The quotations for the secondary refined lead were mostly at discounts of 0-50 yuan/mt over SMM #1 lead price. The traders’ quotations for the domestic lead stood at discounts of 50-0 yuan/mt over the SHFE 2110 lead contract. The quotations in the trading market were generally lower than the smelters’ quotations, and downstream users turned to purchase from the traders, leading to a sharp decline in the social inventory, especially in Zhejiang, Guangdong, and other major consumption areas.
Compared with the smelters, more downstream companies will take the National Day holiday. There’s only one working day in the first week after the holiday, and the inventory may increase more in the plants. The stocks are likely to be transferred to the social warehouses for the delivery of the SHFE 2110 lead contract in the second week after the holiday.
