[SMM Analysis: Social Inventory of Lead Ingot Continues to Increase as Delivery Period Approaches]

SMM News on July 10: According to SMM, as of July 10, the total social inventory of lead ingot in five regions tracked by SMM reached 61,100 mt, an increase of 4,200 mt from July 3 and 3,200 mt from July 7.

This week, maintenance and the commissioning of new capacity coexisted in primary lead smelters, leading to a slight increase in supply. Meanwhile, lead prices fluctuated at highs, and suppliers mostly sold at discounts. Cargoes in warehouses in Jiangsu, Zhejiang, and Shanghai were quoted at discounts of 80-20 yuan/mt against the SHFE lead 2508 contract. However, downstream enterprises had scattered demand, and their rigid demand was more inclined to purchase cargoes self-picked up from production sites at smelters. Some downstream enterprises were cautious about high prices and had a strong wait-and-see sentiment, leading to a cumulative increase in social inventory of lead ingot in warehouses. In addition, the SHFE lead 2507 contract is approaching delivery next week. Considering that the current spread between futures and spot prices of lead exceeds 200 yuan/mt, suppliers intend to transfer inventory to delivery warehouses, which is also one of the main factors driving the increase in social inventory of lead ingot. Next week, during the SHFE lead delivery week, suppliers are expected to transfer more inventory to delivery warehouses, and the social inventory of lead ingot will continue to increase before delivery.