Lead supply adequate to meet demand

While demand for lead has been steady of late, there appears to be an adequate supply to meet that demand, writes Metals Economics Group of Halifax, N.S., in a recent report on the base metal which is enjoying its best prices in seven years.

The research report forecasts an average London cash price for lead of 27-28 cents (US) lb for 1988, and a 25 cents average price for 1989. An economic slowdown late this year and/or in 1989, the report warns, could depress prices further.

Lead (like many other base metals) is recovering from an oversupply position which has kept prices down during the past few years. While last year in London it averaged 27 cents , in 1986 it could only manage 18 cents . (Producer prices for lead in North America tend to average 4 cents -8 cents higher, the report points out.)

Primary production of the metal last year in the non-Communist world increased by 2.6% in 1987 to 4.2 million tons. In the U.S. in 1987, production of lead from secondary sources jumped by almost 11% over the previous year, the increase attributed to higher prices and improved smelter demand. Refined lead production is forecast to rise by about 2.5% this year to 4.3 million tons. New production

Expected to make a big splash on the market in the near future is Cominco Ltd.’s Red Dog project (zinc-lead-silver) in Alaska, which could be in production in 1990. Increased production is also anticipated from Australia, and the U.S. and Asia are expected to boost global secondary supply. Little change is forecast for European production.

Non-Communist consumption of refined lead held steady last year at 4.51 million tons compared with 1986. About 75% of total lead consumption can be attributed to batteries. The research company foresees demand for batteries increasing in coming years thanks to higher consumption in China, India and Brazil. On the other hand, lead as an additive in gasoline is a dying market.

New applications for the metal include in road asphalt as a means of prolonging road life, in nuclear waste containment and in roofing materials. Also, in California, batteries are being used in a project to test their electrical load-levelling potential during peak-usage hours.

Consumption of the metal is forecast to rise by 1-1.2% into the mid-1990s.

Aiming to become Canada’s first vanadium producer is Carbovan Inc., a company owned 50% by Agra Industries, 25% by COATS-listed Renzy Mines and 25% by Fairfax Financial Holdings. Agra and Renzy are the original partners, Renzy having struck a deal with Fairfax for financing of its share of the project.

Cost of the extraction plant to be built in the Fort McMurray area of northern Alberta is $9 million, Renzy President R. A. Geisler said. Carbovan will feed the plant with fly ash purchased from oil sands project operator Suncor Inc. The plant is expected to be in operation by mid-1989.

Initially planned by Carbovan is production of 2-2.3 million lb per year of V2O5 and 30 million lb per year of carbon black. Also, molybdenum, nickel and rare earths are expected to be extracted.

Vanadium is used to form alloys; for example, it is an additive in steel making. Carbon black is used in the manufacture of rubber goods, automobile tires, for instance.

According to The UX Report, published by The Uranium Exchange Co. in the U.S., uranium stood in fifth place in 1987 in the non- Communist world in terms of value of metal production. Topping the list were gold, iron ore, copper and zinc, while placing below uranium were lead, nickel, platinum and silver.

In Australia, two of the bigger mining companies, CRA Ltd. and North Broken Hill Holdings, report they are merging their lead and zinc mining and smelting production facilities and international marketing activities associated with these operations. The companies will, however, continue to market zinc separately to their domestic customers. The merged company will have annual production of 380,000 tonnes zinc-in-concentrates and 250,000 tonnes lead-in-concentrates.

And speaking of the non-Communist world’s fourth-largest producer of gold, recent news reports have Australia suffering from a shortage of cyanide which is used to recover gold. The price of cyanide “down under” has apparently skyrocketed.