Lead Ingot Social Inventory at Risk of Accumulating Further

SHANGHAI, Feb 15 (SMM) - The social inventory of lead ingots across China’s five major markets added 20,800 mt MoM to 58,900 mt as of January 30, but fell back to 56,900 mt as of February 13.

Very few primary lead smelters were shut down for the CNY holidays, while most downstream enterprises took a break, driving up the social inventories. In addition, January 16 was the delivery date of SHFE 2301 lead contract, and also the day when most downstream companies were closed for the CNY holidays. Cargo pick-up from social warehouses was basically stagnated during the CNY holidays. As a consequence, the social inventories ended four consecutive months of decline.

Instead of restocking after the CNY holidays, downstream enterprises mostly relied on leftover inventories from pre-holiday stocking. Smelters shipped their backlog inventories to social warehouses after the holiday. In this context, the social inventories are at risk of climbing further.