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Market Briefing - July 21, 2008
At the time of our last update (June 30), lead prices were trading
at around $1,700/tonne. However, prices have recently rebounded
on the back of some bullish news (Bulgarias reduced target
of lead output in 2008), exceeding $2,000/tonne in mid-July. The
lead cash quote had slipped below $1,550/tonne in early July
the lowest price since November 2006. The market has also been supported
by a decline in LME inventories, which have fallen from a peak of
101,175 tonnes on July 9 to 92,025 tonnes on July 21.
Mine output registers an improvement
According to ILZSG, the concentrate tightness, which was particularly
significant last year, has eased. Global mine output increased by
8.4% y-o-y to 1.54m tonnes in the first five months of the year,
with May also registering a notable increase from the previous month.
Mine output has now increased for the third consecutive month. GFMS
Metals Consulting expects the pace of concentrate production to
pick-up over the remaining Q3 and Q4. This, in turn, should allow
the rate of refined output to increase, which will increase the
rate of inventory accumulation. We forecast global mine output to
increase by 9.3% to 3.94m tonnes in 2008.
> This article gives the introduction to our latest detailed
analysis on the market. In order to receive a free copy of the Base
Metals Market Briefing, please contact: info@gfms-metalsconsulting.com.
Disclaimer: Whilst
every effort has been made to ensure the accuracy of the information
used in this document, GFMS Metals Consulting cannot guarantee such
accuracy and GFMS Metals Consulting does not accept responsibility
for any losses or damages arising directly, or indirectly, from
the use of this information.
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