Lead highlights

摘要

Until November 10, lead's rally was continuing to push relentlessly higher, with official three-month prices peaking at 1,745 dollars/tonne. This is nothing short of amazing, especially given that as recently as June the market looked like it had long since passed its peak and was plunging towards 900 dollars/tonne. As we made clear in last month's report, surprisingly resilient demand in the West, a lack of Chinese exports, and a number of unscheduled mine supply disruptions have resulted in a sustained draw-down of LME stocks, creating genuine tightness in the market again. This has been the main factor responsible for the spectacular revival in lead prices (and premiums). However, we have been warning that the market was over-extended at such high levels and was due for a severe correction. It took a collapse in copper to finally bring high-flying lead back down to earth. The heavy metal plunged from above 1,700 dollars/tonne to 1,500 dollars/tonne in virtually one day as profits were taken, stops were uncovered, and selling pressure started to snowball.