According to SMM survey, social lead ingot inventory across five major markets in China totalled 57,000 mt as of April 18, down 5,600 mt from Thursday April 11 and 8,300 mt from Monday April 15.
According to the survey, the primary lead smelters in Henan Province are currently undergoing maintenance. Meanwhile, secondary lead smelters in places such as Anhui Province are forced to reduce production due to insufficient scrap supply, resulting in a temporary tightening of supply. As SHFE lead prices breached the 17,000 yuan/mt mark, downstream companies mainly purchased under long-term contracts. Still, buyers turned to consume social inventories against the reduced supply of secondary lead. The price spread between futures contracts and spot cargoes has expanded rapidly, exceeding 400 yuan/mt, prompting sellers to deliver cargoes to warehouses. The supply in the spot market has tightened. Inventories can accumulate further due to additional deliveries of lead ingots to SHFE warehouses. However, in the near term, the supply of secondary lead is insufficient and the social inventory of lead ingots is expected to continue its downward trend.
