Lead prices consolidate as the fundamentals look healthier

摘要

Lead prices held up well last week, extending gains on Thursday to $1,832/tonne, up fromthe post-Glencore announcement rally of $1,821.50/tonne. Lead’s robust performanceis not surprising as the market was already looking fairly well balanced before the latestcutbacks, and it was set to tighten up further with the closure of Century and Lisheen.But, in addition to this, LME lead stocks are also relatively low. As such, it now looks likelead’s fundamentals will tighten up even more and, ironically, this is happening notbecause the lead market is in poor shape, but more because the zinc market is. In theory,the cut in lead mine output could create a much tighter lead market, but with over 50%of lead coming from recycling, the higher lead price is likely to lead to more scrap enteringthe supply chain.