Global lead strategic planning outlook Q2 2023

The stark contrast between China's deflationary and the ROW's inflationary pressures continues to be mirrored in lead markets. Relative LME price strength has persisted with the LME/SHFE arbitrage widening in June to around the peak it set in December. The engineered ROW economic slowdown has taken its toll on base metals prices during Q2 but lead has fared the least worse, a fact no doubt reflecting the stability created by the dominance of demand from the replacement automotive battery sector. Despite the relative softness of China's refined market, it remains firm at the wider global level, while the concentrate market appears to be as tight as ever. Mine production is continuing to prove slow to recover but, against a slowing consumption growth, it will ultimately result in surpluses of metal and concentrate that soften these markets by 2026. In today's (2023$) money we have lead falling from around $2150/t in 2023-2024 to $1900/t in 2027-2028.