What’s the key takeaway from this report?
Years of severe tightness in lead concentrate supplies are coming to an end as the mine supply response to the higher prices of recent years finally kicks in. This will combine with softening lead demand growth in the medium term to overturn the large refined lead deficits of the past four years and transition the market into substantial surpluses.
What key questions does this report answer?
- As the market adjusts, will more smelter capacity be required?
- Which sectors have pulled down Chinese lead demand?
- How will the price react to a changing lead metal market?
This report also comes with charts and data sets, including this one, which forecasts global consumption patterns out to 2040.
The significant lead concentrate supply tightness of recent years now eases with new mine production coming stream, leading to meaningful surpluses from 2021. Refined lead availability recovers after four years of substantial deficits from this additional primary supply plus weaker Chinese consumption, pushing the lead metal market balance into surplus beyond this year. We forecast weaker prices in the medium and longer term with softer lead demand growth from Chinese auto and ebike sectors, although general ROW performance remains good. Mine supply growth will average 3.7% p.a. from 2019-2023 but with adequate refining capacity for smelters to consume this additional feed. Total global stocks of refined metal are nevertheless slow to recover and will remain at historical lows until 2021, after which increased lead concentrate supply will rapidly restore normal – and then excessive – stock levels in terms of days of consumption.