Lead prices remain on their steady uptrend and have been eroding resistance around Octobers six-year high above $2,600 per tonne. We expect the underlying strengthening fundamentals to maintain the uptrend. Primary producers may struggle to respond to higher lead prices and we doubt there is much-hoarded scrap around given how strong prices have been. The demand side of the equation may see weaker growth as auto sales are showing signs of slowing, lithium-ion batteries continue to gain market share from lead-acid batteries in the e-bike sector and automakers, governments and consumers switch their focus to electric vehicles (EVs). Lead may not lose out too quickly because we think growth initially will be driven by hybrids over pure EVs, and hybrids retain lead-acid batteries. Overall we remain positive for lead prices, from fundamental, technical and positioning perspectives. We expect supply-side issues to be the main driver and we have nudged up our forecast for Q1 to $2,580 per tonne.
Analysis by Andy Cole, base metals analyst and editor of MBRs Base
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