Frequent Environmental Protection Incidents Limit Supply, Leading to Continued Decline in Lead Ingot Social Inventory [SMM Survey]

SMM, December 26: According to the SMM survey, as of December 26, the total social inventory of lead ingots across five regions tracked by SMM stood at 53,800 mt, down by 4,600 mt compared to December 19 and by 2,400 mt compared to December 23. According to the survey, frequent environmental protection incidents have occurred recently in the lead market. Notably, Anhui, the largest production area for secondary lead, has implemented production restrictions due to smog, marking the third orange smog alert issued in December. Local secondary lead enterprises have continued to face production constraints. Meanwhile, environmental protection inspections in Hunan are still ongoing and are expected to conclude in early January. The air pollution issue in Jiangsu, Zhejiang, and Anhui has worsened, with Jiangsu issuing a smog alert today, leading to partial restrictions on vehicle transportation in the region. The limited supply of lead ingots and transportation restrictions have increased downstream enterprises' reliance on social warehouse sources for lead ingot procurement, further driving the decline in social inventory of lead ingots. On the other hand, air pollution in regions such as Hebei, Henan, and Shandong has gradually eased, with Shandong already lifting its smog restrictions and Henan expected to follow suit soon. After the New Year holiday next week, attention will turn to the potential resumption of production at lead smelting enterprises in Hunan, as well as the impact of year-end account settlements and inventory checks being lifted, which may lead to a recovery in regular procurement by downstream enterprises and boost consumption expectations.