Lead prices touched the highest in over two months on concern over potential shortages and as investors took short positions on the zinc/lead ratio. Environmental inspections at secondary lead smelters in China have reduced supply in recent month. This has led to a sudden spike in prices of Lead.
The ratio of zinc to lead – which is often traded because the two metals are usually found in the same ore bodies has dropped to 1.25, the lowest since December, after touching 1.39 in April and March, the highest since 2007.
The lead market was in deficit by 60 kilo tonne in January to March 2018 which follows a deficit of 421 kilo tonne recorded in the whole of 2017. Total stocks at the end of March were 27 kilo tonne lower than at the end of 2017. No allowance is made in the consumption calculation for unreported stock changes.
World refined production during January to March 2018 from both primary and secondary sources was 2915 kilo tonne which was 3.8 % higher than in the comparable months of 2017. Chinese demand was 35 kilo tonne above the comparable period in 2017 and represented just under 43 % of the global total. For the USA, apparent demand has decreased by 6 kilo tonne for January to March 2018 compared to the same months of 2017. In March 2018, refined lead production was 975.9 kilo tonne and consumption was 1013.6 kilo tonne.