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The Lead rose by 23% in the third quarter. The bank looks for demand growth in 2012 of 4% to 4.5%, then 5% next year.

06 Oct 2012

LONDON (Commodity Online): Lead may be poised for further gains, although a period of consolidation may be needed first, according to BNP Paribas in a commodities snippet.

“The metal rose 23% in the third quarter. The bank looks for demand growth in 2012 of 4% to 4.5%, then 5% next year. Producers may struggle to keep up with demand in future years,” said Stephen Briggs, senior metals strategist with BNP Paribas.

A 100,000-metric-ton supply surplus is expected for 2012. However, the bulk of this occurred in the first half and the lead market may move into a small deficit in 2013 that will widen in 2014.

“Visible stocks are already quite low and even if some unreported inventory does resurface, we expect the market to become genuinely tight over the next two years. Following lead's price recovery, this prospect may be partly priced in already, so a correction is quite possible in the short term.

However, “we are firmly of the view that there is much upside potential over the next year or so, as real tightness begins to bite. Our price target for late 2013/early 2014 remains USD2,800/t,” BNP Paribas concluded.


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