China smelter group agrees to lower Q1 copper charges
The charges tend to fall when ore supply declines and rise when more concentrate is available.
Lead’s recovery from nine month lows continued on Tuesday with benchmark prices on the London Metal Exchange rising 1.5% to $2,380 a tonne ($1.08 a pound).
“Lead from a raw materials side is probably the tightest commodity market out there. There has been a big clamp down on Chinese private sector mining. China is around 60 percent of primary lead supply,” BMO Capital Markets analyst Colin Hamilton told Reuters.
Prices were likely to hit $2,640 in the third quarter according to BMO marking the investment bank as one of the most bullish on the outlook for the metal, mainly used in batteries. A FocusEconomics report published on Tuesday shows consensus forecast among analysts of $2,428 a tonne in Q3. Lead peaked in January this year at $2,643.
Over 2014-2016 global mined lead supply shrank by roughly 500,000 tonnes, or 10%. This year, consultancy Wood Mackenzie forecast a market deficit of 115,000 tonnes and 56,000 tonnes in 2019 after a 119,000 shortfall last year. More than 50% of annual lead supply is from the secondary market and in the US as much as 80% is recycled material.
Headline stocks in LME-registered warehouses have fallen by a third since the start of last year to 131,225 tonnes.
