Widening Futures-Spot Spread Promotes Transfer to Delivery Warehouse, Intensifying the Shift of Primary Lead In-Plant Inventory [SMM Weekly Review on Primary Lead Inventory]

Feb 21, 2025, at 3:54 pm

As of February 21, the in-plant inventory of primary lead from major delivery brands stood at 24,500 mt, down 8,000 mt from February 14. This week, the SHFE lead 2502 contract entered delivery. Suppliers transferred inventory to delivery warehouses, leading to a general decline in the inventory of lead smelters from mainstream delivery brands. Additionally, SHFE lead showed a trend of rebounding after dipping during the week. Due to ample market supply, spot transactions were mostly conducted at discounts, with the discount for primary lead from major production regions further widening WoW. As of February 21, the discount for cargoes self-picked up from production sites in Henan against the SHFE lead 2503 contract was 260-240 yuan/mt. The widening spread between futures and spot prices prompted more suppliers to transfer inventory to delivery warehouses. Subsequently, the in-plant inventory of smelters is expected to continue converting into visible inventory (social inventory).

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Widening Futures-Spot Spread Promotes Transfer to Delivery Warehouse, Intensifying the Shift of Primary Lead In-Plant Inventory [SMM Weekly Review on Primary Lead Inventory]

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