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Providing additional attraction is the fact that the critical driver of the projected tightness in the lead market comes from the US rather than China, which certainly is a positive demand leverage in the context of r..

14 Dec 2013

LONDON (Commodity Online): The refined lead market is expected to continue to tighten next year, with an 84Kt deficit driving a decline in the global stock-to-consumption to its lowest level since the 2011, said London based Barclays in its recent market report.

“Resultantly we project the LME cash price to average $2,350/t in Q4 next year, which would represent an attractive 15% upside from the lows in the current quarter,” the bank projected.

Providing additional attraction is the fact that the critical driver of the projected tightness in the lead market comes from the US rather than China, which certainly is a positive demand leverage in the context of relative incremental regional GDP growth expectations.

Investor positioning in the metal still remains light despite bullish projection. One reason for such hesitance commonly cited is the uncertainty regarding the size of offwarrant stocks ex-China and the potential buffer this offers to counteract price up-side.

Using ILZSG and visible stock data from the beginning of 2012 to the end of Q3 this year we find that during that period there has been a 50Kt off-warrant ex-China global stock build with the majority coming in the US.


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