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Top Market Drivers

1. Dollar to Euro exchange rate.
2. Global production.
3. Global capacity utilization.
4. Automotive production  Europe/NA/China.
5. Chinese lead prices.

Market Commentary

Not surprisingly, lead has also fallen this past month on the back of a stronger dollar. In fact, lead fell below MetalMiner’s May short-term support level of $2,000/metric ton. Market sentiment also appears weak.
According to Shanghai Metals Market, of 10 secondary Chinese lead smelters surveyed on or about May 29, only one producer forecasted rising prices, three forecasted declining prices and the balance came in neutral.
And though Q1 2015 global lead mine output dropped 0.9% from the same quarter in 2014, world usage declined by 2.7%, according to the International Lead and Zinc Study Group. Moreover, the supply/demand balance appears largely in harmony. In other words, the world could see a small deficit of 17,000 metric tons, but provisional data from ILZSG
suggests that supply outpaced demand.

The fundamentals do not support or suggest any imminent lead shortage to give prices
a boost.

The Outlook

Three-month lead closed the month of May at $1,952/mt, down about 8% from last month. We warned readers last month of a short-term pullback that did indeed materialize. And though lead had a strong price rally in April, the dollar’s ascent in May pushed lead prices lower. As with the other base metals, price risk remains to the downside.


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