SHANGHAI, Jan 14 (SMM) – The social inventory of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin decreased 1,400 mt from last Friday January 7 and up 300 mt from Monday January 10, and stood at 91,900 mt as of January 14.
The goods for the delivery of SHFE 2201 lead has been delivered to the warehouses as this is the last week before the date of delivery, according to SMM research. The supply of lead ingot remained largely unchanged, and the downstream carried out routine restocking ahead of the Chinese New Year. The COVID-19 pandemic situation in Henan and Tianjin escalated, disrupting logistics (rising freights and less trucks available). Some traders had to cancel or postpone their delivery of orders, and the downstream consumers encountered more difficulties when sourcing from another province (e.g. it is difficult for a downstream manufacturer in Zhejiang to purchase lead ingot from Henan), hence they had to purchase from surrounding market including Shanghai and Jiangsu, resulting in a decline in the local and the overall inventories.
Looking into next week, the supply of primary lead is expected to be smooth, while the downstream will mostly take holidays. The market shall watch the progress of COVID in places like Henan and Tianjin, especially its impacts on logistics.