Lead Prices Explained

Experts predicted cool lead prices in the market as supply exceeded demand by 15 kilometric tons. Increased production from Australia, Peru, Kazakhstan, and Sweden rose by 0.6% (and would grow if there was no reduction in Ireland, Portugal, and the U.S.). In Europe, the trend remained unchanged as Bulgaria and Italy posted increased outputs, offset by the falls of Poland and Germany.

On the demand side, the strong application of refined lead metal in China, India, Japan, and South Korea keeps Asian lead metal prices fluctuating. The tight monetary policy in China still pulls back the country’s appetite for lead, influencing its global prices.

Why are lead prices fluctuating?

1. Chinese Demand

China tops as the world’s largest producer and consumer of lead. Despite its economic issues, the country keeps its huge appetite for lead to continue its development projects. Thus, the country’s expansion in industrialization means more demand for this commodity, triggering pushing lead prices upward.

2. Future Outlook in Lead Demand

The battery industry accounts for 85% of lead demand which means there’s a big room of interest to fill in. Additionally, both emerging and developed economies such as South Korea suggest that lead demand and prices will double in the next decade.

3. Competing Technologies

Experts believe that lithium-ion batteries have the potential to compete and replace lead-acid batteries as a power storage source in automotive applications.

However, lithium-ion batteries have limitations as lead-acid batteries work better in high-powered vehicles. Additionally, lithium is more expensive than lead. Thus, these advantages and disadvantages determine lead prices in the future.

4. Health Concerns

Various health studies concluded that chronic lead exposure is toxic to humans. These studies prompted manufacturing industries to remove lead in their key product formulation such as paints, gasoline, and drinking water pipes.

Overall, studies like this can potentially affect lead supply, demand, and prices.

5. Economic Conditions

The overall state of the economy can strike lead prices. For example, during a recession, demand for lead tends to decline which can lead to lower prices.

Conversely, during a period of economic growth, the need for this metal tends to increase which pushes lead prices higher.

Which variables impact the price of lead?

• Chinese Demand
• Future Outlook in Lead Demand
• Competing Technologies
• Health Concerns
• Economic Conditions
• Production Cost
• Government Regulations
• Speculative Trading Activity

Where does lead come from?

The oldest metal known to man has been used for over 6,000 years. Its earliest usage record was in Mesopotamia. The ancient Egyptians, Greeks, and Romans used lead extensively for a variety of purposes such as making water pipes, cooking utensils, and jewelry.

The ancient Sumerians, who lived in Mesopotamia (modern-day Iraq) discovered lead around 6,400 BC. They found lead nuggets in the ground and learned how to smelt it into a metal.

Lead production declined after the fall of the Roman Empire but began to increase again in the Middle Ages. Its application included making bullets, cannonballs, and other weapons. Additionally, it’s an important element in making pipes, roofing, and other building materials.

The rise of the Industrial Revolution in Great Britain in the 18th century paved the way for the massive lead production which continues until today.

Lead is processed from its ores which are mainly galena (lead sulfide) and cerussite (lead carbonate).

This method requires crushing and roasting ore to remove sulfur. Next, a blast furnace will smelt the roasted ore to produce lead bullion. The last step is about refining lead bullion to remove impurities.

What are the uses of lead?

These are the top lead applications in various industries:

1. Batteries – The major consumer of lead among industries in the automotive sector as lead-acid batteries heavily rely on lead for cars, trucks, and other vehicles.

2. Ammunition – The security and military industry is the second customer as lead is a major raw material for making bullets, cartridges, and other forms of ammunition.

3. Power and Telecommunication – Cable sheathing protects electrical cables from damage and corrosion. Lead is a good choice for cable sheathing because it is resistant to both physical and chemical damage. Moreover, lead-sheathed cables are vital for power transmission lines, telecommunications cables, and underwater cables.

4. Research and Medical Sectors – Radiation shielding is another specialized application for lead as this metal is dense and absorbs radiation well. Hospitals, nuclear power plants, and research laboratories use lead for this purpose.

5. Building and Electrical Materials – Roofing, solder, and bearings need lead sheets or rods for roofing, siding, gutters, and pipe installation. Additionally, lead is an ideal component for making lead weights and fishing sinkers.

Presently, the majority of these products come from the top lead-producing countries which are China, Australia, the United States, Peru, and Mexico.

What is the future price of lead?

While Chinese demand and future need for lead steer its marketability, there’s a noticeable deadlock between its price determiners making lead prices uncertain. Two additional factors add to the weight of its economic profitability:

• Emerging practices such as increased lead recycling accommodate the declining lead production for the time being. This practice supports green metal sourcing which fits the global sustainable campaign.
• The start of global decarbonization accelerated EV (electric-powered vehicles) production and sales which resulted in a downturn for ICE (internal combustion engine) vehicles, slowing lead-acid batteries’ bankability.

Thus, these factors coupled with the current volatility and uncertainty caused by the Ukraine-Russia war, and the recent Chinese economic deflation led Statista analysts to issue a short-term price forecast of a not-so-bullish market at $2,070/tons in 2028.