Global lead investment horizon outlook - Q3 2022
The repercussions of Russia's invasion of Ukraine reverberate. Albeit now below their peak, energy prices are still up significantly. Wider inflationary pressures therefore remain in place and interest rates are being raised in response. Increased living and borrowing costs are pushing economies towards recession, and lead prices have succumbed to US dollar strength and bouts of fervent weakness in wider sentiment. However, global lead markets responded positively to news of potential smelter disruptions in Europe due to high energy prices. We are reluctant to conclude that these will result in a notable reduction in global supply. Potential support packages that could benefit smelters have yet to be revealed, lead market pricing could yet become kinder to smelters, and any displaced raw materials could potentially be processed elsewhere. Even if refined supply isn't cut, global lead markets should be reasonably supported given the resilience of demand from automotive batteries.