After the Mid-Autumn Festival, lead prices weakened and transactions were sluggish. How did the inventory of primary lead smelters accumulate? [SMM Analysis]

Before the Mid-Autumn Festival, SMM preliminary survey found that most lead-acid battery companies took 1-3 days off. Although orders for batteries in the energy storage sector rebounded in September, there was no "overtime" production during the Mid-Autumn Festival holiday. Production during the holiday was mainly for long-term orders, and there was almost no pre-holiday stockpiling demand from downstream. After the holiday, lead prices continued to fluctuate downward, and downstream buyers remained on the sidelines.

Did smelters' inventories accumulate again after the holiday? How were spot market transactions? After the holiday, SMM surveyed major primary lead smelters and traders in Henan, Hunan, Jiangxi, and Guangdong:

Henan Smelter A: After the holiday, smelters' inventory only saw a slight increase. Additionally, some inventory that was not sold before the holiday has been arranged for logistics transfer to social warehouses for delivery.

Henan Trader B: On the first day after the holiday, about 500 mt of spot lead from Henan manufacturers were sold. After lead prices weakened, market transactions were poor, and there was still a considerable amount of long-term order inventory that had not been picked up by smelters.

Guangdong Smelter C: Although inventory increased by several hundred mt during the Mid-Autumn Festival holiday, it will be gradually delivered as long-term orders. Compared to the inventory pressure during the Mid-Autumn Festival holiday, there is more concern about the inventory increase exceeding requirements during the National Day holiday.

Hunan Smelter D: After resuming production in September, full production was not arranged. The previously high inventory has been gradually reduced, and post-holiday inventory only remains for 2-3 days. Post-holiday spot prices narrowed from discounts to zero, but actual transactions were poor.

Hunan Smelter E: Specific inventory details are not convenient to disclose. Post-holiday spot discounts narrowed to 25-0 yuan/mt, but actual transactions were less than 5 trucks, as downstream buyers prefer to buy on rising prices rather than falling prices.

Jiangxi Smelter F: There was almost no inventory after the holiday. Spot prices continued to quote premiums over SMM 1# lead, and during the holiday, spot inventory was arranged to be transferred to social warehouses for delivery.

In early September, the expected concentrated maintenance of primary lead smelters was realized. The recovery of secondary refined lead was lower-than-expected due to factors such as profits/losses, and the decline in refined lead market supply offset the weak seasonal demand. After the Mid-Autumn Festival, the inventory of smelters undergoing marginal reduction or maintenance in September was gradually reduced or pre-sold during the holiday, leading to a post-holiday inventory decline. Additionally, smelters that maintained normal production saw a slight inventory increase of 1-2 days after the holiday, and post-holiday shipments were not rapid. Some market traders told SMM that the macroeconomic improvement and slight rebound in copper, aluminum, and zinc prices did not boost domestic lead prices. On the first trading day after the holiday, the most-traded SHFE lead 2410 contract fell slightly more than expected. There was no significant change in downstream lead-acid battery consumption, and the enthusiasm for low-price procurement was poor, with a strong market wait-and-see sentiment.