The lead price performed well in 2017. China produced the most of the metal, but six other countries also produced notable amounts.
The lead price performed well for much of 2017, hitting a six-year high. Many are forecasting a bright long-term outlook, with supply tightness seen propping the metal up.
According to the latest report on lead from the US Geological Survey, the base metal‘s average LME price for the first 10 months of last year was $1.04 per pound, 27 percent more than the same period in 2016.
The lead price reached a high of $1.22 per pound in October 2017, marking a height in price not seen since 2011. This was due to increased demand for refined lead and tightness in supply, as per the US Geological Survey.
Lead production increased by 4 percent last year, the International Lead and Zinc Study Group says, with metal consumption increasing as well, by 5 percent. Overall there was a production deficit of 1 percent, or 120,000 tons of refined lead.
With supply tightness affecting the lead price, it’s worth looking at the world’s top producers of lead. Last year, China produced the most of the metal, though a number of other countries also put out significant amounts. Without further ado, here’s a look at the seven top lead-producing countries of 2017, as per US Geological Survey data.
Mine production: 2.4 million MT
China produced 2.4 million MT of lead last year, up slightly from its 2016 output of 2.34 million MT. Interestingly, the increase came even as the country suffered mine closures.
According to Reuters, ongoing shutdowns across China contributed to the lead price rise at the end of the year. As tens of thousands of factories close, China is expected to cut production further due to pollution problems and environmental inspections. Stockpiles have been dwindling as a result.
Mine production: 450,000 MT
Next on the list is Australia, whose 2017 lead production of 450,000 MT pales in comparison to China’s output. Australia put out roughly the same amount in 2016. Like China, Australia faced lead and zinc mine closures in 2016, and yet production remained the same the following year.
In early 2018, LeadFX (TSX:LFX) applied for environmental approval to build a processing plant at the Paroo Station lead carbonate mine. This mine was placed on care and maintenance in 2015 due to low lead prices at the time, but with prices rebounding the firm wants to ramp up again. If LeadFX receives the environmental approvals required, the plant could process up to 70,000 tons of lead per year.
3. United States
Mine production: 313,000 MT
Lead production dropped again in the US in 2017. Last year, mine production totaled 313,000 MT, which is down from 346,000 MT in 2016. According to the US Geological Survey, production fell by about 10 percent. Despite the lead price climbing, production in the US was down in 2017 in all four states where production is carried out.
A strike beginning in March 2017 at Hecla Mining’s (NYSE:HL) Lucky Friday mine in Idaho reduced production by as much as 90 percent. A year later and the strike still continues; according to Hecla’s website, a limited amount of lead production is being carried out by its salaried staff. Also in the US, Aqua Metals’ (NASDAQ:AQMS) new lead refinery was built in Nevada, lending to increased lead recycling.
Mine production: 300,000 MT
Peru also saw a reduction in lead production in 2017. Last year, the country produced 300,000 MT of lead, while 2016 production totaled 314,000 MT. Zinc-focused base metals miner Trevali Mining (TSX:TV) is one company producing lead in Peru.
Mine production: 250,000 MT
Last year, Russia beat out Mexico for the fifth place on the list. Unlike the countries mentioned above, Russia’s lead production remained unchanged from 2016 to 2017 at 250,000 MT. There is not much public information regarding the country’s lead production.
Mine production: 230,000 MT
In Mexico, lead production came in at 230,000 MT last year, down slightly from 2016 production of 232,000 MT. Excellon Resources (TSX:EXN) operates the La Platosa mine in Mexico, which exploits high-grade silver, lead and zinc manto deposits.
Mine production: 150,000 MT
The seventh-largest producer of lead is India, whose production increased only slightly in 2017 to 150,000 MT; that’s up from 147,000 MT in 2016. As with Russia, information on lead in India is limited.
What’s next for the lead price? Will Chinese factory closures continue to drive the price upward?
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Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Trevali Mining is a client of the Investing News Network. This article is not paid-for content.