[SMM Analysis: Downstream Enterprises Receive Delivery Sources, Social Inventory of Lead Ingots Reverses Decline]

SMM May 22 News: According to SMM, as of May 22, the total social inventory of lead ingots across five locations tracked by SMM reached 50,300 mt, a decrease of 5,700 mt from May 15 and a decrease of 8,800 mt from May 19.

This week, lead prices fluctuated downward. Primary lead smelters generally sold their products at market prices, with quotations against the SMM 1# lead average price ranging from a discount of 50 yuan/mt to a premium of 100 yuan/mt ex-factory. Meanwhile, secondary lead smelters, facing widening losses, became more reluctant to sell at low prices, with some enterprises halting shipments. Quotations for secondary refined lead narrowed to a discount of 50-0 yuan/mt against the SMM 1# lead average price ex-factory, and even premium quotations emerged, inverting the price relationship with primary lead. Additionally, production cuts and suspensions reappeared at secondary lead smelters in major production areas, while downstream enterprises preferred primary lead sources for their just-in-time procurement needs. Furthermore, after the delivery of SHFE lead contracts last week, the goods re-entered the market, with some downstream enterprises prioritizing nearby procurement, leading to significant reductions in social inventory in the Jiangsu, Zhejiang, and Tianjin regions. At the same time, the advancement of new capacity and production resumptions in secondary lead is expected to increase supply, but the off-season trend in the lead-acid battery market persists. It is anticipated that after the supply increase materializes, the decline in social inventory of lead ingots may slow down.