SMM News on May 15: According to SMM, as of May 15, the total social inventory of lead ingots across five locations reached 56,000 mt, an increase of 8,500 mt from May 8 and an increase of 8,900 mt from May 12.
Recently, as the SHFE lead 2505 contract entered the delivery phase, suppliers gradually transferred their stocks to delivery warehouses, leading to a concurrent rise in the inventory of lead ingots in social warehouses. The lead-acid battery market was in its traditional off-season in May, with downstream enterprises generally experiencing production cuts, resulting in limited demand for lead ingots. This made it difficult for smelters to quickly digest the inventory accumulated during the Labour Day holiday. Additionally, as the SHFE lead delivery period approached, suppliers transferred their inventory to delivery warehouses. Furthermore, this week, the ex-warehouse quotations of primary lead smelters in major producing areas were at discounts of 210-80 yuan/mt against the SHFE lead 2506 contract. The widening spread between futures and spot prices was also one of the factors influencing suppliers' decision to transfer stocks to delivery warehouses. In addition, as lead prices rebounded amid fluctuations, the profitability of secondary lead improved, prompting some enterprises to plan for production resumptions. The anticipated increase in supply poses a risk of further inventory buildup in social warehouses for lead ingots.
