The decline in lead prices fueled warehouse deliveries, and social inventory increased to nearly 40,000 mt [SMM survey]

According to an SMM survey, as of September 9, the total social inventory of lead in five regions surveyed by SMM reached 38,700 mt, an increase of 18,400 mt compared to September 2, and an increase of 7,200 mt compared to September 5.

The survey revealed that lead prices continued to decline. Some holders sold off at low prices or waited for warehouse delivery, while others dumped their stock fearing further price drops. Ex-factory prices of spot orders were quoted at discounts of around 100 yuan/mt against SMM 1# lead average price. Additionally, this week was the week before the SHFE lead 2409 contract delivery. More holders moved their inventory to delivery warehouses, leading to a significant increase in social inventory. Furthermore, many primary lead smelters were under maintenance, combined with the falling lead prices, which dampened the production enthusiasm of secondary lead smelters, resulting in tighter spot supply. However, with the SHFE lead 2409 contract delivery date approaching, it is expected that holders will continue transferring inventory to delivery warehouses, potentially sustaining the increase in social inventory.