July Lead Price Forecast: On the Up and Up

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lead-prices-L1To begin July, lead prices moved up nearly a quarter of 1% in futures trades as participants increased their positions due, in part, to a pick-up in spot market demand and a boost in base metals overseas.

Meanwhile, according to a report from the Business Standard, lead for August delivery at the Multi-Commodity Exchange also grew by nearly .25%.

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Our own Raul de Frutos reported just this week that lead prices have hit a one-year high despite neutral fundamentals. It’s been a year of fluctuation for lead, but three-month London Metal Exchange data has prices at $1,900 per metric ton.

Stated de Frutos: “The latest data reported by the International Lead and Zinc Supply Group (ILZSG) indicate the world refined lead metal supply exceeded demand by 23,000 metric tons during the first four months of 2016. Reductions in Australia, China, India and the U.S. led the fall in global lead mine production of 5% compared with the first four months of 2015.”

A Closer Look at the World’s Lead Usage

In addition, world refined lead metal output fell by 1.8%, excluding Chinese usage of refined metal which increased by 4.2% due in part to an 8.8% increase in European demand.

These figures are considered fairly neutral, but the market has not been convinced by this development until now. What’s changed?

“Lead prices are being driven by funds’ increasing appetite for industrial metals,” de Frutos wrote. “This means that even though lead fundamentals don’t look overly bullish, the wind is now blowing at lead’s back. Funds are either seeing a tightening in the fundamentals that we can’t see yet or they are simply buying metals as sentiment in the industrial metals complex has improved. It looks more like the latter.”

You can find a more in-depth lead price forecast and outlook in our brand new Monthly Metal Buying Outlook report. Check it out to receive short- and long-term buying strategies with specific price thresholds.

 

 

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