Primary Lead Smelters Will Operate Steadily During the National Day Holiday, Downstream Pre-Holiday Stocking Fell Short of the Same Period in Previous Years [SMM Analysis]

According to an SMM survey before the National Day, lead prices slightly weakened at the beginning of the week, with holders selling at discounts. Downstream actively inquired and engaged in bargain hunting, making the market transactions noticeably active. Mid-week, as lead prices strengthened amid a favourable macro front, downstream sentiment turned cautious. Market traders were concerned about "inflated" prices and post-holiday lead price fluctuation risks. In September, downstream consumption slowly recovered but still fell short of last year. More downstream enterprises, after meeting holiday production needs, were not in a hurry to purchase more inventory for the holiday.

By this Friday, downstream pre-holiday stocking was basically completed, with some downstream manufacturers entering the National Day holiday early. Most manufacturers will take a 2-5 day break, while primary lead and secondary refined lead smelters will operate steadily according to their original production plans, with some expectation of lead ingot inventory accumulation after the holiday.

According to the SMM survey, last year, many smelters mentioned keywords such as holiday shipment scheduling and rising spot premiums (before Mid-Autumn Festival and National Day, primary lead smelter inventories were sold out, and downstream queued for pickup with limited post-holiday inventory increase expectations). However, this year, SMM survey of these smelters found that the spot market performance was slightly dull—several primary lead smelters did not sell out their inventories this week, and there was almost no pre-sale or holiday shipment scheduling for primary and secondary refined lead smelters. Similar to previous years, inventories expected to slightly accumulate during the holiday in Henan, Jiangxi, Hunan, and other regions will subsequently be transported to social warehouses, preparing for October delivery. After the holiday, as the favourable macro front subsides, lead prices may gradually return to fundamentals, and more attention will be needed on the actual consumption realization of favourable news.