Lead fell 1.35 percent, $2,008 US per tonne, on the London Metal Exchange (LME) over the past week. The metal declined along with other commodities, largely on fears of a deepening recession in Europe.
These concerns, along with worries about slowing demand in China, could hold back base metal prices in the short term, Nicholas Snowdon, a commodities trader with Barclays Capital in New York, told Reuters.
“But ultimately,” he said, “we are still in a phase where this tension between current softness in Chinese demand and the expectation of an ultimate improvement in conditions there in the second half of the year is keeping us in a relatively range-bound market for the majority of base metal prices.”
Looking longer term, according to an April 30 report from the International Lead and Zinc Study Group, Chinese lead demand is expected to rise 7.3 percent in 2012, and the country’s production is expected to reach 2.54 million tonnes, or 52 percent of global output.
Demand for lead-acid batteries is also improving in China as more battery makers reopen their facilities. The Chinese government closed 90 percent of them when it brought in stricter environmental measures in 2011.