Lead Market Update (January 10, 2013)

Lead for three-month delivery is now trading at around $2,308.50 per metric ton (MT) on the London Metal Exchange (LME). That’s up 5 percent from $2,193.50 a month ago, according to data from Metal-Pages.

LME lead has risen 15 percent since October 26, while prices on the Shanghai Futures Exchange have fallen 0.8 percent, according to a recent Bloomberg article. That’s because inventories monitored by the Shanghai exchange have hit a record high of 78,328 MT on slower demand for batteries for cars and e-bikes in China. Meanwhile, LME prices are rising due to tighter supply in the US and forecasts that lead demand will exceed supply in 2014.

That gap has raised concerns about weakness in LME lead prices in the coming months. “Prices in London should start to reflect developments in China,” Credit Suisse analyst Ivan Szpakowski told Bloomberg. “On a three-month horizon, we think LME will underperform.”

Even so, Credit Suisse expects lead prices to rise this year on concerns about tight supplies. The bank expects three-month lead to trade at an average of $2,450 per MT in the fourth quarter of 2013.

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