Given the recent price rallies in base metals, the market can continue to expect upward movements. The bull party winners — copper, aluminum and zinc — experienced rapid price increases while lead and tin have languished (tin more so than lead).
However, lead prices appear to have joined the bull party, as prices have increased for five consecutive days. Trading volumes appear high, which means that a new uptrend may have started for lead.
Lead and zinc are often discussed in tandem. Between those two metals, zinc has shown greater price strength, with prices recently rallying to their highest levels in more than 10 years. Lead, meanwhile, has been the “shy sibling” during the last couple of months, prices have started to sharply increase.
Fundamentals also look favorable and support the price rally.
The Chinese environmental campaign has heavily impacted lead. According to research group Antaike, 80% of illegal secondary smelters have been shut down during the second half of 2017. China has also lost an important source of raw materials from North Korea due to its commitment to international sanctions.
What This Means for Industrial Buyers
Even if there is still room for additional lead price increases, buying organizations will want to watch the behavior of both lead prices and trading volumes. Heavier trading volumes will signal an official lead price rally.
To better understand how to adapt industrial metal buying strategies for the metals that you purchase, take a look at our Monthly Metal Buying Outlooks.