[SMM Analysis: Environmental Protection-Driven Production Cuts in Inner Mongolia and Anhui Lead to a Decline in Social Inventory of Lead Ingots]

SMM News on June 9: According to SMM, as of June 9, the total social inventory of lead ingots across five regions tracked by SMM reached 53,400 mt, an increase of 3,500 mt from June 3; [the inventory] was over 500 mt higher than that on June 5.

Recently, lead prices have shown a trend of rebounding after hitting a low. Suppliers have been actively selling off their stocks. In some regions, the discount for primary lead quotes has widened to a discount of 230-180 yuan/mt against the SHFE lead 2507 contract ex-factory. In the Jiangsu, Zhejiang, and Shanghai regions, the discount for warrant-backed cargo quotes has widened to a discount of 50-20 yuan/mt against the SHFE lead 2507 contract. In particular, the price of secondary lead in the Jiangsu and Zhejiang regions has inverted compared to primary lead, with secondary refined lead quotes reaching a premium of 50-100 yuan/mt against the SMM 1# lead average price ex-factory. This has prompted a small number of downstream enterprises to purchase on dips as needed, with a preference for primary lead delivery cargoes, leading to a slight decline in social warehouse inventory. Additionally, environmental protection inspections were carried out in regions such as Inner Mongolia and Anhui last week, prompting some secondary lead enterprises to cut or suspend production. The short-term reduction in supply will ease the pressure on inventory buildup of lead ingots.