Decrease in Social Inventory of Lead Ingot Slowed Down amid the Production Reduction and the Approaching Delivery of SHFE 2207 Contract

SHANGHAI, July 1 (SMM) - As of July 1, the social inventory of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin was 84,500 mt, down 400 mt from last Friday (June 24) and up 2,700 mt from last Monday (June 27).

According to SMM, the main primary and secondary lead enterprises were still in production reduction and the lead prices were at a high level. The secondary refined lead was quoted in discounts of 300 yuan/mt over the SMM #1 lead average price. In this case, downstream enterprises preferred secondary lead and were cautious about procurement. At the same time, the lead futures rose, but the spot transactions were poor. The basis between spot and futures once expanded to 400 yuan/mt, leading to the increasing delivery enthusiasm of cargo holders, especially in Zhejiang. Lead smelters will see both increase and decrease in production next week. At the same time, as the delivery of SHFE 2207 contract is approaching, lead ingots stocks will be transferred from lead smelters to social warehouses. Therefore, the social inventory of lead ingot may increase.