SMM News on May 19: According to SMM, as of May 19, the total social inventory of lead ingots across five regions tracked by SMM reached 59,100 mt, an increase of 12,000 mt from May 12 and 3,100 mt from May 15.
Recently, the lead-acid battery market remains in the off-season, with most downstream enterprises experiencing production cuts, leading to limited demand for lead ingots. Meanwhile, primary lead production remains stable, and with a slight improvement in secondary lead profits, secondary lead enterprises in Hunan and Guizhou provinces have commissioned new capacity, resulting in a steady increase in supply. The spot market is generally trading at a discount, with secondary refined lead quotations against the SMM 1# lead average price at a discount of 130-0 yuan/mt ex-factory, diverting some of the downstream rigid demand. Primary lead quotations against the SHFE lead 2506 contract are at a discount of 200-80 yuan/mt ex-factory. The significant spread between futures and spot prices has increased suppliers' willingness to transfer to delivery warehouse. Following the delivery of the SHFE lead 2505 contract last week, delivery brand supplies continued to shift to social warehouses, with social inventory continuing to rise. Additionally, some imported crude lead has recently arrived in China, which may partially offset the scrap supply gap for secondary lead enterprises. Combined with the commissioning of new capacity, there is still upward pressure on lead ingot inventory in the future.
