Lead To Average USD2,300/tonne in 2015
BMI View: Lead prices will push higher over the coming months as consumption growth outstrips production growth, resulting in increasingly deep lead market deficits.
Short-Term Outlook (three-to-six months)
Lead prices will gather strength after lacklustre performance in H114 and could head up to USD2,300/tonne in the coming months. In line with our prediction in June, lead prices have made a bullish break above technical resistance and look set for strong performance (See: 'Monthly Metals Strategy', June 2014). We expect gains across the industrial metals complex over the next three months as China's most recent PMI print points towards some recovery in Chinese manufacturing. China's HSBC Flash Purchasing Managers' Index (PMI) easily outgunned consensus expectations of 49.7 for June, posting at a surprisingly strong 50.8. The lead market will experience increasing tightness over the coming months as mine supply and refining capacity come offline.
|Price Strength Ahead|
|Three Month LME Lead, Monthly Chart, USD/tonne|