SHANGHA, Jun 2 (SMM) - According to SMM research, as of June 2, the total social inventory of SMM lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin reached 35,900 mt, an increase of 4,100 mt from May 19 and 5,000 mt from May 26.
According to the research, as the off-season extended, most smelters still reduced production and had limited demand for lead ingots. In this scenario, primary and secondary lead smelters generally shipped in discounts, and spot goods were sold at discounts of more than 200 yuan/mt against the SHFE 2307 lead contract. Cargo holders had no choice but to transfer goods to the social warehouses to ease the shipment pressure. Therefore, the social inventory of lead ingots increased significantly. Next week, the supply of lead ingots is expected to decline further as secondary lead smelters either stop or reduce production amid low lead prices. However, approaching the delivery of the SHFE 2306 lead contract, the social inventory of lead ingots may still increase as deliverable goods are transferred to SHFE warehouses.
