Spot lead prices rose more than $130 on the London Metal Exchange last week, closing at $1,900.50 a tonne on Tuesday. That’s a gain of over 7 percent.
Lead rose with other base metals, mainly on expectations that the world’s central banks would take further measures to stimulate their economies. Lead jumped 4.7 percent on Friday alone, leading all base metals, after European Council President Herman Van Rompuy said that the European Commission will propose a single bank supervisor, after which Eurozone banks will have direct access to the European Stability Mechanism, the region’s permanent bailout fund.
The move means that funds will be sent directly to struggling banks, rather than through national governments. Many see this arrangement as a way to recapitalize banks without adding to countries’ ballooning debt loads.
Base metals are heavily used in industry, so government or central bank moves that could stimulate the economy – and industrial production along with it – often have a positive impact on prices.