According to SMM survey, social lead ingot inventory across five major regions in China totalled 70,500 mt as of November 3, up 1,800 mt from Friday October 27 and 200 mt from Monday October 23.
The recent performance of lead consumption has been poor, with downstream lead-acid battery manufacturers only purchasing as required. With ample supply available, smelters of non-deliverable brands of primary lead and secondary lead sold with large discounts. Shipments under small orders were quoted with discounts of around 200 yuan/mt against the average price of SMM #1 lead, ex-works. Warrants were quoted flat from SHFE 2311 lead contract prices. Downstream companies favoured cargoes from smelters, growing social stocks of lead ingots further. Tighter supply of lead ingots in the wake of maintenance at one lead smelter in Henan will mitigate the short-term pressure of lead ingots inventory accumulation. The price spread between futures contracts and spot cargoes expanded. As of last Friday, the discounts of some deliverable brands exceeded 250 yuan/mt, increasing deliveries to warehouses by suppliers. Delivery to warehouses will affect social inventory. However, the transfer of lead ingot inventories will typically occur in the week of the delivery of the SHFE front-month contract.
