Lead Ingot Social Inventory Hits New 4-Year Low, Attention on Refinery Inventory Transfer Direction [SMM Survey]

According to an SMM survey, as of August 26, the total social inventory of lead ingots in five regions reached 17,100 mt, a decrease of 47,700 mt compared to August 19 and a decrease of over 500 mt compared to August 22.

The survey indicated that after large downstream enterprises concentrated on picking up goods last week, lead inventory in some warehouses began to rebound. Recently, lead prices have fluctuated downward. Lead smelters have actively cleared inventory and sold off goods, with the ex-factory prices of cargoes under scattered orders mostly quoted at a discount of 200-100 yuan/mt to the SMM 1# lead average price. Some traders purchased at low prices, transferring lead inventory to social inventory. During this period, imported lead holders in the Shanghai area have expanded discounts to offload goods, with imported lead quoted as low as a discount of 400 yuan/mt to the SHFE lead 2409 contract, leading to a continued decline in lead warehouse inventory in this region. In late August, many primary and secondary lead smelters underwent maintenance, and downstream enterprises also generally reduced production. With both supply and demand decreasing, short-term changes in lead social inventory are expected to be minimal, but attention should be paid to the next round of warehouse deliveries after September.