Despite seeing an overall drop in 2015, lead prices have been on the rise as of late, and some are cautiously optimistic that the situation could be looking up for the metal.
Overall, lead spot prices are up 4.92 percent, at $0.849 per pound, so far in 2016. According to a report from FocusEconomics, that’s largely the result of increased seasonal demand from battery makers.
“Lead is in higher demand during the winter months because both battery use and failure are more common when the weather is cold,” the report explains.
Still, as Raul de Frutos of Metal Miner notes, such rallies have also been common in previous years, with overall price trends moving downward later on. “It will be interesting to see if lead prices can hold above these levels,” he states in an article.
For its part, Focus Economics sees lead prices increasing this year, buoyed by higher demand from China and the US. However, a strong US dollar will likely keep a damper on any significant price increases. The firm’s panelist forecasts for the average lead price came in at US$1,654 per MT for Q1 and US$1,730 per MT for Q4.
“Lead prices are expected to remain low in the first quarter of the year and a gradual recovery is foreseen in the upcoming quarters,” the report reads.
Still, some forecasters are less optimistic than others. While Toronto Dominion is calling for lead spot prices to average US$2,028 per MT for Q4 2016, Oxford Economics is calling for US$1,400 per MT; meanwhile, Pezco Microanalysis is expecting just US$1,297 per MT over the same period.
Lead isn’t the only base metal that’s seen a price rise recently. Copper prices are up 5.54 percent year-to-date, at $2.25 per pound, while zinc prices are up 12.57 percent, at $0.81 per pound, and nickel prices are up 8.17 percent, at $4.23 per pound.
Certainly, it appears that things could be looking better for the metals sector, but it’s worth noting that a number of market watchers still remain cautious. “Buyers should keep an eye on the recent strength in industrial metals,” de Frutos states. “We have not yet found out whether this is really just another dead cat bounce or something more meaningful.”
FocusEconomics notes that three of the panelists it surveyed cut their Q4 2016 lead price projections, while eight left their predictions unchanged. One panelist increased their forecast.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.