[SMM Analysis: Social Inventory of Lead Ingot Increases as Expected on the Eve of Delivery; Follow-up Focus on Production Trends of Lead Smelters]

SMM News on July 14: According to SMM, as of July 14, the total social inventory of lead ingot across five regions reached 63,400 mt, an increase of 5,600 mt from July 7 and an increase of 2,400 mt from July 10.

With only one working day remaining until the delivery of the SHFE lead 2507 contract, suppliers continued to transfer inventory to delivery warehouses, resulting in an expected increase in the social inventory of lead ingot in warehouses. It is understood that based on estimates of the open interest of the front-month contract, the delivery volume of lead ingot in this round is expected to be close to 18,000 mt, an expected MoM increase of 5,000 mt from the previous month's delivery volume. However, due to the recent preference of downstream enterprises for purchasing cargoes self-picked up from production sites of smelters with relatively lower prices, there is limited availability of deliverable inventory for delivery brand enterprises. Meanwhile, the current base of social inventory of lead ingot in warehouses is higher than that of the same period last month. Therefore, even though the expected delivery volume of lead ingot is higher than that of the previous month, it has not led to a significant transfer of lead ingot inventory. In addition, the commissioning of new capacity at primary lead enterprises in Central China recently has not met expectations, and unplanned maintenance has occurred, resulting in a regional tight supply of lead ingot. It is expected that after the resolution of the lead ingot delivery factors, the growth rate of social inventory will slow down.