Lead Market Update (October 25, 2012)

Spot lead prices slipped roughly 12 percent after hitting a 2012 high of $2,315 per metric ton on the London Metal Exchange earlier this month, according to data from Metal-Pages. Lead is now trading at around $2,024.

Lead, like other base metals, moved up after the US Federal Reserve announced a third round of quantitative easing (QE) in mid-September. Under the central bank’s latest plan, it will buy $40 billion worth of bonds a month from private banks in a bid to stimulate the US economy.

However, base metals, including lead, have since moved lower on disappointing earnings reports from US companies and ongoing concerns about the Eurozone debt crisis. As well, China, the world’s leading lead consumer, recently reported that its annualized economic growth rate fell to 7.4 percent in the third quarter, down from 7.6 percent in the second quarter.

Looking longer term, a number of analysts are calling for higher lead prices in 2013 due to rising battery demand and little new mine production. Morgan Stanley, for example, is now forecasting that prices will average $2,425 per MT next year, up about 20 percent from today’s levels.