Lead: 5 things to look for in 2018 Report

Insight 19 January 2018

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Report summary

This year promises to be even more dynamic for lead markets than 2017, with the acute shortfall in concentrate supply sparking a decline in refined lead availability, helping to push the price up to a 6½-year high. We forecast a 115kt deficit in the refined lead balance in 2018, after a 119kt deficit last year, and do not expect to see the market move back into surplus until 2020, which will help sustain higher lead prices. In recent months lead concentrate TCs dropped to historical lows and much of the global market dynamics will depend on whether primary smelters outside China choose to sacrifice volume to support TCs.

Executive summary
- New Rest of World mine supply crucial to recovery in concentrate stocks
- Refined lead dynamics dictated by smelters' appetite for margin over volume
- US lead supply vulnerable to being trumped by Chinese demand
- Slowdown in auto production puts the brakes on burgeoning lead demand
- Chinese smelter expansion constrained by environmental clampdown