Global lead short-term outlook April 2019

Lead's essentially sound fundamentals were unable to stop the price slide from negative sentiment generated by global auto sector pessimism, perceptions over the impact of new ebike regulations in China and continued strength of the dollar. Continued mine disruption is keeping the concentrate market tight although the Queensland floods do not appear to have had much impact. Peñasquito mine is again having difficulties and, while the precise impact is not yet clear, it has recently been suspended pending an end to a blockade. It is now even less likely to meet an already reduced production guidance. It is thus little surprise that some 2019 contract terms have been rolled over and spot TCs have come under renewed downward pressure, helped by the widened arbitrage between SHFE and LME prices in April.