Holders Transfer Cargoes to Warehouses, Lead Ingot Social Inventory Accumulation Intensifies [SMM Survey]

According to the SMM survey, as of October 10, SMM lead ingot social inventory in five regions reached 60,100 mt, an increase of 14,600 mt compared to September 30, and an increase of 6,700 mt compared to October 8.

According to the survey, after the National Day holiday, SHFE lead showed a trend of jumping initially and then pulling back. During this period, holders actively shipped goods, and the ex-factory transaction prices of refinery sources weakened. The spread between futures and spot prices for lead once expanded to 300 yuan/mt (i.e., a discount of 300 yuan/mt to the SHFE lead 2411 contract), increasing the willingness of holders to transfer to warehouses. Meanwhile, with only three working days left until the delivery date of the SHFE lead 2410 contract, holders gradually transferred lead ingots to delivery warehouses, continuing the upward trend in social inventory. As the delivery of SHFE lead approaches next week, the factors of warehouse transfer may still allow room for social inventory to rise. Additionally, primary lead smelters resumed production after maintenance, and new capacity was put into operation, leading to a phased increase in lead ingot supply. In mid-October, environmental protection inspections will be conducted in Anhui, and with battery scrap prices remaining high, secondary lead enterprises are suffering significant losses. Some enterprises may reduce or suspend production, which could somewhat alleviate the pressure of subsequent lead ingot inventory accumulation.