[SMM Analysis: Lead Ingot Inventory Buildup as Expected Before Delivery, Follow-Up Focus on Production Trends of Secondary Lead Enterprises]

SMM News on June 16: According to SMM, as of June 16, the total social inventory of lead ingots across five locations reached 56,400 mt, an increase of 3,000 mt from June 9 and an increase of 1,600 mt from June 12.

Today is the delivery day for the SHFE lead 2506 contract. Before delivery, suppliers continued to transfer inventory to delivery warehouses, and some social warehouses received lead ingot shipments over the weekend, leading to a continued increase in social inventory of lead ingots. Based on the open interest of the SHFE lead 2506 contract, the delivery volume of lead ingots in this round is less than 13,000 mt. The existing inventory in social warehouses is sufficient to meet the delivery requirements. Both the delivery volume and the volume of transferred lead ingots are lower than those of the previous month. A significant reason for this is the widespread production cuts and suspensions by secondary lead enterprises in early June. The rigid demand from downstream enterprises shifted to the primary lead market, causing a decline in in-plant inventory of primary lead enterprises. Moreover, spot transactions changed from trading at a discount (against the SMM 1# lead average price) in the previous month to trading at a premium this month, with most of the primary lead supply flowing directly to the consumer market. Additionally, after the completion of this round of SHFE lead delivery, we need to monitor the maintenance progress of primary lead smelters and the production resumption trends of secondary lead enterprises after the partial recovery of losses in the secondary lead sector.