[SMM Analysis: Downstream Procurement Favors Nearby Warehouse Cargoes, Lead Ingot Social Inventory Hits Fresh 15-Month Low Again]

SMM Dec 8: As of December 8, the total social inventory of lead ingots across five regions tracked by SMM fell to 20,500 mt, down 10,200 mt from December 1 and 3,200 mt from December 4, hitting a new low again in 15 months.

Currently, both primary and secondary lead smelters are undergoing maintenance or production cuts, leading to tight regional supply of lead ingots. Quotations for cargoes self-picked up from production sites remain relatively firm, with mainstream producing areas quoted at premiums of 0–50 yuan/mt against the SMM #1 lead price ex-works. Meanwhile, cargoes from Jiangsu, Zhejiang, and Shanghai warehouses are quoted at premiums of 0–50 yuan/mt against the SHFE lead 2601 contract. Due to proximity to consumption areas, some downstream enterprises prefer warehouse cargoes for just-in-time procurement, further reducing social warehouse inventory of lead ingots. However, it is worth noting that in-factory inventory of primary lead smelters has accumulated. As of last Thursday, weekly in-factory lead ingot inventory at primary lead enterprises had risen to above 10,000 mt, with some suppliers lowering prices to sell. The decline in social inventory of lead ingots may slow down in the near term.

Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM’s internal database model, for reference only and not intended as decision-making advice.