The days of cheap lead are over
Lead has been the best performing metal this year, up 130% in 16-months. And the long-term outlook is positive, as new record highs are expected next year.
Lead has been the best performer in the metals complex this year, gaining 130% to a 16-month high in September. A key driver has been supply disruptions culminating in China's suspension of some of its lead-smelting capacity after allegations of lead poisoning.
But concern over supply looks overdone for now, given that demand has slid and stocks in warehouses are at a six-year high. Despite that, the long-term outlook for lead is positive, says BNP Paribas Fortis. China is now "pivotal" to the global supply of refined lead; its share of production has risen to 40%.
"China has taken on this dirty and dangerous industry shunned by other countries". As it "inevitably" gradually tightens environmental standards, higher production costs are likely to filter nito higher lead prices.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Meanwhile, the pipeline of mine production set to come onstream after 2010 is thin, and lead-acid battery demand from the automobile sector 70% of total demand is set to rocket as emerging markets' consumption of cars and lorries grows to Western levels.
"The days of lead being a cheap metal" look over. RBS expects the annual average lead price to hit a new record high of $2,750 a tonne in 2013.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
-
8 of the best houses for sale with home cinemas
Houses for sale with home cinemas – from a modern oast-house style property in Kent to a house in Buckinghamshire with Dolby sound and bespoke seating
By Natasha Langan Published
-
Rachel Reeves faces £23 billion capital gains tax “black hole” – will she be forced to look elsewhere?
The fiscal watchdog has downgraded its forecast for capital gains tax revenues, leaving chancellor Rachel Reeves with £23 billion less than previously expected
By Katie Williams Published