Transfer to Delivery Warehouse Drives Social Inventory Increase; Focus on Lead Ingot Imports and Maintenance Fulfillment [SMM Lead Ingot Social Inventory]

As of March 13, according to SMM, the total social inventory of lead ingots in five regions monitored by SMM reached 67,800 mt, an increase of 2,900 mt compared to March 7 and an increase of 1,500 mt compared to March 10. As the delivery date of the SHFE lead 2503 contract approaches, suppliers continue to transfer to delivery warehouses, leading to a sustained increase in social inventory. On March 12, heavy pollution weather alerts in regions such as Hebei and Henan were lifted, and vehicle transportation resumed normal operations. A few lead smelters that had been under production constraints gradually resumed operations. The recovery in transportation may lead to a short-term increase in warehouse transfers, leaving room for further growth in social inventory before delivery. Meanwhile, the resumption of smelters is expected to increase supply, maintaining the risk of inventory buildup for lead ingots. Additionally, the recent brief opening of the lead ingot import window is expected to bring a certain volume of imported crude lead into the domestic market, potentially filling the gap in domestic raw materials such as lead concentrates and scrap batteries, with the possibility of being quickly refined into refined lead. Furthermore, in late March, large delivery brand smelters are planning maintenance, which may present an opportunity for a turning point in the growth trend of lead ingot social inventory.