Social inventories of lead ingots rose amid lower downstream purchase intention

SHANGHAI, Jan 8 (SMM) –Social inventories of lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin rose 5,700 mt from the prior week to 58,900 mt as of Friday January 8, an SMM survey showed.

In 2021's first trading week, some lead acid battery companies reduced production, and lead prices fluctuated at high levels after breaking 15,000 yuan/mt. Downstream plants were consuming the left over stocks from the previous week, with low purchase intention for raw materials. Price spread between futures and spots widened amid sluggish market transactions. Smelters and traders gradually delivered lead ingots to warehouses, leading to an increase in the social inventories.

As the settlement day of 2101 contract approaches, suppliers may deliver more stocks if the price spread expands further. The lead ingot inventories will also be affected by the holiday arrangement at lead acid battery companies and the COVID-19 pandemic in Hebei.