Hard to justify excessively bearish sentiment for lead

摘要

Lead prices set a fresh low on Thursday at $1,566/tonne, but rebounded to $1,637/tonneon Friday on the back of reports that a group of Chinese zinc smelters were looking tocut some 500,000 tonnes of production next year in an effort to underpin the market.We would assume that zinc cutbacks would also reduce primary lead output too and,judging by Friday’s performance, the market thought so too. Zinc prices were up 6% atthe day’s highs on Friday, while lead prices were up 2.8%. Given the different dynamicsand set-up in the lead market, we are surprised that the Chinese news did not havemore of an impact on lead, mainly because lead stocks are already so much lower thanthose of zinc. However, Friday’s modest rally was short-lived and lead prices have sinceslumped to fresh lows at $1,551.50/tonne.