According to an SMM survey, as of June 20, SMM total social inventory of lead ingots in five major regions in China was 65,700 mt, down 6,800 mt WoW (from June 13) and down 8,500 mt from Monday (June 17).
According to the survey, the SHFE 2406 lead contract delivery was completed last week, and due to intensified scrap supply issues, more smelters in Anhui, the largest secondary lead production area, cut or suspended production, causing social warehouse inventories to fall. Lead prices surged strongly during the week, with battery scrap prices rising even more than lead prices, exacerbating losses for secondary lead smelters. Discounts for secondary refined lead narrowed from 150-0 yuan/mt against the SMM #1 lead average price at the beginning of the week to discounts of 50 yuan/mt to premiums of 100 yuan/mt by the end of the week. Higher secondary refined lead prices than primary lead prices led downstream companies to turn to primary lead, accelerating the consumption of social warehouse inventories. This week, with both maintenance and recovery in deliverable brands primary lead smelters, deliverable brands supply will remain limited. Secondary lead supply recovery will be difficult due to scrap supply issues, and before the actual arrivals of imported lead, social warehouse inventories are expected to continue declining.
