Lead Ingot Inventory Transfer to Delivery Warehouse, Social Inventory Increases as Expected [SMM Survey]

According to an SMM survey as of December 12, SMM lead ingot social inventory across five locations reached 57,900 mt, an increase of 900 mt from December 5 and 1,900 mt from December 9.

The survey indicates that lead prices moved downwards after a higher opening during the week, with average transaction activity in the spot market. During this period, secondary lead smelting enterprises resumed production and the new capacity ramped up production. Secondary refined lead was quoted at a discount of 200-0 yuan/mt against the SMM 1# lead average price ex-factory, while primary lead at a premium of 50-100 yuan/mt against the SMM 1# lead average price ex-factory. Downstream enterprises inclined towards just-in-time procurement of lower-priced secondary lead sources. Additionally, with only one working day left until the delivery of the SHFE lead 2412 contract, suppliers transferred ingots to delivery warehouses, leading to an expected increase in lead ingot social inventory. Compared to the inventory increase rate before the last delivery period in mid-November, the increase in social inventory before this round of lead ingot delivery has been slower, primarily due to year-end cash flow recollection factors, with suppliers more inclined to sell and realize cash.