NEW YORK (Commodity Online): LME Lead prices have fallen from a high of $2900/tonne in April to around $1900/tonne in October, a decline of about 34%! With lead markets expected to be in surplus this year and next, the possibility for a bullish recovery seems daunting given the possibility of a global economic slowdown.
-The International Lead and Zinc Study Group (ILZSG) estimates lead market surplus to be 188,000 tonnes in 2011 and 97,000 tonnes in 2012.
-Batteries account for almost 85% of global lead consumption. The problem with lead batteries is its increasing recycling. This means that new supply will be increasingly sacrificed for recycling used lead batteries.
-Fears of a Chinese slowdown and surfaced. Considering that the booming Chinese auto industry contributed heavily in supporting lead prices, a slowdown in the economy might mean less auto sales and less lead batteries.
-Even analysts seem to support that lead prices may remain weak in the near term. As Paul Robinson of CRU says “Aluminium first, followed by nickel, zinc, copper, lead and lastly tin” when asked about ranking metals with the strongest growth potential.
