Although it has been trading at all-time lows in real dollar terms, lead could be poised for a turnaround, reports Metals Economics Group of Halifax, N.S.
“The concentrate market is in severe shortage and structural changes have affected the industry,” says the research company. “With car sales picking up in the U.S., London Metal Exchange stocks starting to show signs of declining and a battery season that is expected to be better than the past two years, lead may have found a basis for improved prices.”
Most analysts expect the price of the metal will rise to the US19-to-22 cents-per-lb. range in the latter half of this year and climb to US25 cents in 1994.
“But a breakout in prices is not predicted until inventories are depleted and a substantial revival in demand is seen,” the company cautions. The metal is expected to benefit from increased economic activity in the U.S., which is expected to spread to Japan and then to Europe. Also, growth in southeast Asia and Chinese imports should boost consumption. Current and projected tightness in the lead concentrate market is expected to push prices higher in the short term and cause a squeeze by 1997, as demand improves. Little or no growth is expected in primary capacity.
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