Mumbai, India reported yesterday that lead is expected to continue to fall due to decreased demand and increased supply.  Lead did find some support after the world’s largest producer of lead, China, suffered their Sichuan earthquake in May.  As well, July saw lead rise on a fear of decreased production from China and its resulting drop in exports.

According to Shanghai Nonferrous Metals Trade Association, China’s largest lead producer Henan Yuguang Gold and Lead Co and others have agreed to reduce production until September. Moreover, South Korea plans to triple its base metal reserve lent some support to the lead prices, as the country consumes nearly four per cent of the total world output. However, high inventories capped the possible upside movement in prices.

Output is likely to increase due to the commissioning of new plants in China followed by increased production in Canada, India, Japan, Poland, the UK and Russia. Production of refined lead has grown 5 per cent CAGR (Compound Annual Growth Rate) in the last five years. The total production in 2008 is expected to increase to 8.53 million tonnes from 8.1 million logged in last year.

Read the full report here.  

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