Lead outlook is better as prices jump 9% in a month

Lead prices have risen by 9% in the last month, which has improved the forecast for the metal for the rest of this year and the first quarter of 2023. A rise in Chinese activity has been “the most significant driver of this transition,” according to a commentary from research firm Fitch Solutions Country Risk and Industry Research. The prognosis for the lead for the remainder of this year and the first quarter of 2023 has improved as a result of the metal’s price increase of 9% in the previous month. The “most important driver of this transformation” has been an increase in Chinese activity, claims a commentary from research firm Fitch Solutions Country Risk and Industry Research.

These statistics give us hope that China’s real GDP growth will pick up to 5% in 2023 from 3.6% in 2022. The world’s greatest consumer of lead should experience an increase in lead consumption as a result, according to Fitch Solutions. As a result, the research organization increased its lead price projection for 2023 from $2,110 to $2,250 per tonne, which is mostly used in vehicle batteries and soldering. However, it hasn’t revised its long-term pricing projection.
The lead three-month contract was offered for sale for $2,212 on Tuesday, while its cash price on the London Metal Exchange was $2,193.50. Over the previous week, lead prices have jumped by more than 5%. It has increased by less than 1% year over year.

“ Our overall projection for global growth in 2022, at 3.1%, is essentially unchanged from our prediction in October, while our prediction for 2023 has decreased from 2.1% to 2%. According to Fitch Solutions, developed market growth would slow from 2.5% in 2022 to 0.5% in 2023, driving a substantial portion of the global economic slowdown. The World Bank, however, noted in its Commodities Market Outlook that the auto industry’s decline is putting a strain on lead demand. “(Lead) production has not been susceptible to the disruptions that other metals encounter as lead refining has low energy intensity and neither Russia nor Ukraine are big producers,” it stated. In addition to a predicted 5% decline in 2022, lead prices are predicted to decrease by 10% in 2023.

Demand for refined lead will be constrained by supply-side interruption at auto manufacturing, according to Fitch Solutions, which will also affect output. In contrast, the worldwide semiconductor scarcity will last far into 2023, driving up power prices for manufacturing companies, notably in Europe. Compared to 2021, when it increased by 2.4%, we predict that global car production will only increase by 2.3% in 2022 and 4.1% in 2023. This would be a meager recovery from the worldwide output reduction of roughly 20% over the period of 2018–2020, it said. According to the research firm, the global semiconductor scarcity is expected to continue well into 2023, which is favorable for the outlook for vehicle production worldwide.

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