SMM News on May 29: According to SMM, as of May 29, the total social inventory of lead ingots across five regions tracked by SMM reached 49,400 mt, a decrease of approximately 900 mt from May 22, but an increase of 6,000 mt from May 26.
This week coincides with the end of June and the approaching traditional Dragon Boat Festival holiday. Suppliers are generally eager to sell their goods. During this period, spot discounts widened again. In Henan and Hunan, quotations for cargoes self-picked up from primary lead smelters were at discounts of 60-20 yuan/mt against the SMM 1# lead average price ex-factory. The spread between futures and spot prices widened to 200 yuan/mt, prompting some traders to transfer their stocks to delivery warehouses. As a result, the inventory in social warehouses for lead ingots began to increase. Meanwhile, with the Dragon Boat Festival holiday approaching, some lead-acid battery enterprises plan to take 1-3 days off, and combined with the routine inventory check at month-end, the longest holiday period will reach 5 days. Therefore, procurement by downstream enterprises has been relatively weak before the holiday. Especially after the decline in lead prices, the divergence in downstream procurement has widened, with some continuing to wait and see, while others making just-in-time procurement nearby. In addition, due to the absence of lead consumption during the holiday, there is still a risk of an increase in lead ingot inventory.
