LEAD-Major market developments in March
money.ninemsn.com.au
LONDON, April 9 (Reuters) - Global lead prices may stay in a narrow range in the near term as the market awaits news on the restart of Ivernia Inc's Magellan mine in Australia, analysts say.
"We're seeing a lot of wait and see, in particular for clarification on the Magellan mine," said Neil Hawkes of industry consultants CRU.
Operations at the mine, which was to supply about 3 percent of the world's mined lead, were suspended last April, causing a sharp rise in prices.
CRU had assumed production there would resume around mid-year, but as yet no date has been set.
William Adams of Basemetals.com said he expected prices to trade in a $2,600-3,000 a tonne range in the near term.
The London Metal Exchange (LME) three-months price was last indicated at $2,880/90.
Adams said that, unlike other metals, lead demand would hold up relatively well even if there was a recession because of the importance of replacement batteries for existing cars.
Independent consultant Angus MacMillan said stocks might fall to dangerously low levels if they did not rebuild before a seasonal demand pick-up in the United States.
Hawkes said U.S. replacement battery demand was the only saving grace for demand outside China and a few other Asian countries.
"Demand is pretty poor in Europe and North America," he said.
Below are some of the significant recent developments in production, stocks and prices that may influence the direction of the market in 2008.
PRODUCTION:
March 28 - Mexico produced 10,361 tonnes of lead in January, up 17.7 percent from a year earlier, the National Statistics Institute said.
March 18 - Work to improve Doe Run Co.'s Boss secondary lead refinery in Missouri, United States has been delayed, but production is expected to be a touch higher in fiscal 2008 versus last year, an official said. The company previously expected work on debottlenecking at the plant to be finished in October. The official said the plant was currently producing at an annual production rate of 140,000 short tons per year. Production at Doe Run's Herculaneum smelter in Missouri was seen at 150,000-170,000 short tons in fiscal 2008.
March 17 - The global lead market was in deficit by 6,000 tonnes in January, the International Lead and Zinc Study Group (ILZSG) said. Global refined lead use rose to 732,500 tonnes in January from 698,000 tonnes a year earlier. Refined lead output rose to 726,600 tonnes from 691,000 tonnes in January 2007, the ILZSG said.
March 13 - China produced 375,700 tonnes of refined lead in the first two months of 2008, down 2.8 percent from a year earlier, the National Bureau of Statistics said. Output of mined lead rose 25.3 percent over the same period to reach 107,600 tonnes.
PRICES
LME lead prices built on February's strong gains early last month, reaching $3,480 a tonne on March 4 and their highest since November.
The historic peak of $3,890 a tonne was reached in October.
But resurfacing demand worries for industrial metals took their toll and by March 20 the three-months price had fallen to $2,655.
The market steadied after that, helped by a firmer tone in other metals, to end the month at $2,780 with further gains towards $3,000 made in early April.
In January, the twice-yearly Reuters base metals price poll of 43 analysts [MET/POLL] put the median average for the LME cash lead price at $2,518 a tonne in 2008 and $1,967 in 2009.
STOCKS
LME lead stocks edged higher in March, totalling 49,325 tonnes at the end of the month, compared with 45,825 tonnes a month earlier.
Western world commercial stocks were 267,900 tonnes at the end of January, amounting to 2.6 weeks of demand. They previous month they were at 264,900 tonnes and the stocks consumption ratio was the same at 2.6 weeks.
(3000 Xtra users can access Reuters Metal Production Database (MPD) by clicking on mpd.session.rservices.com. MPD details historical and predicted output and capacity for lead, zinc, bauxite, copper and gold mines, alumina refineries, lead, aluminium and copper smelters and copper, lead, zinc and nickel refineries between 1997 and 2011)
(Reporting by Karen Norton; editing by Chris Johnson) |
