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Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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January 2019 | Base Metals


Lead: Springs to life


We said last week that lead’s recent narrow sideways trading range reminded us of a coiled spring, in the sense that prices had the potential to go higher, but were being held back. The break to the upside we warned of has since unfolded, with a rally above $2,100 per tonne. This is in line with continuing signs of fundamental strength with data showing an ongoing supply deficit. Falling LME stocks, tighter spreads and strong price action are all justified by the tightening fundamentals. Going forward, the key will be whether the market is confident enough to follow the data.

ILZSG data showed a 34,900-tonne supply deficit in November As well as being in deficit in November, the lead market was reportedly in a 95,000 tonne deficit in the first eleven months of the year. Considering this, it was hard to justify the long drawn out price decline from the February 2018 high of $2,685 per tonne to the October low at $1,876 per tonne. But with prices breaking higher last week, it does look as though a reality check is underway. Lead stocks drop at a faster pace LME lead stocks dropped at a...

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