Lead surprised just about everyone when it averaged 27 (US) per lb on the London Metals Exchange during 1987, an increase over 18 in 1986. It was a turnaround year for the metal, the price of which had plummeted since 1979 when the lme average reached a 50-year peak at 54.6 per lb. But the real surprise was the continued strength of lead prices into 1988. “In previous years price, peaks were usually the result of supply problems or labor disputes and, consequently, were short-lived,” says Klaus Goeckmann, vice-president, marketing and sales, for Cominco Metals. “But I think there has been a fundamental change, and now it appears that demand is keeping the price at healthy levels, not just in North America, but also in Europe and Southeast Asia.”
So far this year, lead quotes are averaging 30 per lb. and some observers see price strength continuing. Ted Yates, of Cominco’s market research division, is one of those. “Demand is going up and we think the price of lead is going to be firm for the balance of 1988.” Unlike metals such as nickel, which can suffer sudden price drops because of a net flow from east bloc countries to the west, lead has enjoyed a net flow from west to east. “We expect that to continue,” Yates says.
He adds that an increase in demand has been noticed from both the automotive battery industry, which accounts for about 85% of lead consumption, and from the industrial battery sector, which accounts for 15%. Analysts attribute the increase in consumption in the past few years to a stronger economy and, not to be overlooked, to low lead prices themselves. A hot summer (1988) in many parts of North America also helped the battery market avoid its customary summer doldrums. Most analysts and industry experts, however, say the short-term outlook is for lead prices to decline slightly as we move closer to the new year.
Lead surprised just about everyone when it averaged 27 (US) per lb on the London Metals Exchange during 1987, an increase over 18 in 1986. It was a turnaround year for the metal, the price of which had plummeted since 1979 when the lme average reached a 50-year peak at 54.6 per lb. But the real surprise was the continued strength of lead prices into 1988. “In previous years price, peaks were usually the result of supply problems or labor disputes and, consequently, were short-lived,” says Klaus Goeckmann, vice-president, marketing and sales, for Cominco Metals. “But I think there has been a fundamental change, and now it appears that demand is keeping the price at healthy levels, not just in North America, but also in Europe and Southeast Asia.”
So far this year, lead quotes are averaging 30 per lb. and some observers see price strength continuing. Ted Yates, of Cominco’s market research division, is one of those. “Demand is going up and we think the price of lead is going to be firm for the balance of 1988.” Unlike metals such as nickel, which can suffer sudden price drops because of a net flow from east bloc countries to the west, lead has enjoyed a net flow from west to east. “We expect that to continue,” Yates says.
He adds that an increase in demand has been noticed from both the automotive battery industry, which accounts for about 85% of lead consumption, and from the industrial battery sector, which accounts for 15%. Analysts attribute the increase in consumption in the past few years to a stronger economy and, not to be overlooked, to low lead prices themselves. A hot summer (1988) in many parts of North America also helped the battery market avoid its customary summer doldrums. Most analysts and industry experts, however, say the short-term outlook is for lead prices to decline slightly as we move closer to the new year.
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