Global lead investment horizon outlook Q4 2023

Lead markets have held up well in the face of vehicle electrification and the engineered ROW economic slowdown. OE demand for ICEVs in 2023 may have been ~25% below its peak, but lead use in vehicles is still growing because of the importance of replacement demand and the continued role of lead in non-ICEVs. Indeed, total OE demand in all vehicles is forecast to rise through to 2033 on the back of expanding output in the HEV, PHEV and BEV sectors. Although their 2023 average will be the best of the LME metals, lead prices are ending 2023 on a relatively weak footing. This is consistent with market fundamentals as secondary supply has been expanding more rapidly than consumption, which has been particularly evident from the LME/SHFE arbitrage driving the export of surplus metal from China to the ROW. While 2024 should be more balanced, mine supply should rise enough to lift refined stocks from 2025 and concentrate stocks from 2027. Prices will remain supported before then.