Expert lead market insights
Our quarterly lead outlook is published in our Quarterly Metals Report, which covers base, precious and ferrous metals. The impact of supply and demand fundamentals and macroeconomic implications for the lead futures and spot prices are analysed. Our research team produce a lead price range forecast as part of the report.
Lead Outlook – Q4 2023
Lead prices gained momentum in Q3 2023, driven by acute tightness seen in the SHFE contract. The recent spread between lead contracts and spot cargoes widened, resulting in a higher inventory of lead ingots in social warehouses. From the demand side, vehicle production remains stable y/y whilst declining marginally m/m, and we struggle to see demand fundamentals impacting lead prices in the near term. Given the continued replenishment of stocks on the LME warehouses, the tightness that we have seen on lead should diminish in Q4 2023.
The global economy performed better than expected so far in 2023, but concerns about a cold winter, rising oil prices, high borrowing costs, and China's economic slowdown are looming large. Central banks are maintaining the narrative of higher-for-longer interest rates due to persistent higher prices, which has weighed on base and precious metals' performance. Despite pledges from Beijing to support the economy, current measures are not expected to have an immediate impact on the real estate sector, which means that there is unlikely to be a large-scale property development that would increase demand for stainless steel prices in the last quarter of the year. Nonetheless, the cumulative impacts of policy support and a dovish monetary policy in China should create a solid foundation for the economy to recover in 2024. Such a transition should push the sentiment from the oversold into neutral. News out of China and the US should bring stronger bounds of volatility in base metals’ performance in Q4 2023.
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