According to an SMM survey, as of September 12, SMM total social inventory of lead ingot in five regions was 50,400 mt, an increase of 18,900 mt from September 5 and 11,700 mt from September 9.
The survey revealed that early in the week, with a significant drop in lead prices and the approaching delivery of the SHFE lead 2409 contract, many holders actively transferred lead ingot to delivery warehouses in preparation for subsequent delivery. Lead social inventory increased by nearly 20,000 mt this week. Amid falling lead prices, secondary refined lead smelters' losses widened. In a few regions, secondary refined lead was sold at a premium of 50-200 yuan/mt ex-factory over the SMM 1# lead average price. Downstream companies returned to primary lead for rigid demand but mostly consumed in-plant inventory from smelters. Transactions for cargoes under warehouse warrants were mediocre. Next week, following the Chinese Mid-Autumn Festival holiday, on one hand, as the SHFE lead 2409 contract approaches delivery and holders continue transferring stocks, lead social inventory may maintain its upward trend; on the other hand, during the Mid-Autumn holiday period, some downstream companies plan to shut down for 1-2 days. Short-term consumption may be absent, potentially providing room for further inventory accumulation.
