Global lead short-term outlook March 2020

Coronavirus shifted during March from being a China-centric influence on the market to having a fully global impact as most jurisdictions attempt to contain its spread. Demand is typically relatively resilient in the face of economic shocks due to it being dominated by automotive batteries. This economic shock is different because it is the result of the lockdown of populations. We have cut 400kt from our forecast of global demand in 2020. Of course, weaker demand will already be paring back secondary supply, but the full impact of a swathe of ROW mine cuts resulting from coronavirus containment has yet to be felt by the refined market. Primary output is holding up better thanks to the availability of concentrate stocks. Lead lost 10% of its value in March, but declining spot TCs indicate that sustained ROW mine cuts may ultimately curtail primary output and so be supportive of prices. Identified planned ROW mine cuts total 97kt. 65kt/m will be lost if temporary cuts are maintained.