[SMM Analysis: Downstream Enterprises Adopt a Wait-and-See Approach and Exercise Caution in Purchasing After the Dragon Boat Festival, Social Inventory of Lead Ingots Increases as Expected]

SMM News on June 3: According to SMM, as of June 3, the total social inventory of lead ingots across five regions tracked by SMM reached 49,900 mt, an increase of 6,500 mt from May 26 and over 400 mt from May 29.

Following the Dragon Boat Festival holiday, lead prices continued to be in the doldrums. Suppliers were mostly eager to sell their cargoes. In the Henan and Hunan regions, quotations for primary lead cargoes self-picked up from production sites were at discounts of 50-0 yuan/mt against the average SMM 1# lead price, ex-factory. However, downstream enterprises adopted a wait-and-see approach and exercised caution in purchasing. Some enterprises were even still in holiday mode. Trading in the spot lead market was sluggish, and some delivery brand cargoes continued to be transferred to social warehouses. Additionally, as lead prices fell, the prices of scrap batteries declined more slowly. The loss per mt of secondary lead exceeded 1,000 yuan. Smelters had low production enthusiasm and sold very little cargo, which might, to some extent, slow down the rate of social inventory buildup, but it was difficult to change the trend of inventory buildup.