Weak Consumption and Increased Transfers to Delivery Warehouse Lead to Another Rise in Lead Ingot Social Inventory [SMM Lead Ingot Social Inventory]

As of February 17, according to SMM, the total social inventory of lead ingots in five regions tracked by SMM reached 53,400 mt, an increase of 7,200 mt compared to February 10 and an increase of 1,100 mt compared to February 13. Today marked the delivery date for the SHFE lead 2502 contract. Suppliers transferred inventory to delivery warehouses, and lead ingots continued to arrive at social warehouses over the weekend, leading to a sustained inventory increase. Recently, although downstream enterprises have mostly resumed operations, their demand for lead ingots has been weak. Spot prices in various regions shifted from premiums to discounts, with the discount range widening. As of February 17, ex-factory quotations for cargoes self-picked up from smelters in Henan and Hunan were quoted at discounts of 50-0 yuan/mt against the SMM 1# lead average price, with the spread between futures and spot prices exceeding 200 yuan/mt. Meanwhile, secondary refined lead was quoted at discounts of 150-0 yuan/mt against the 1# lead average price on an ex-factory basis. With more options available for downstream enterprises, the short-term increase in lead ingot social inventory is unlikely to reverse.