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FxWirePro Metal Outlook: Lead touches highest level since 2011; further rise likely

The ongoing broad-based rally in industrial metals has pushed the price of lead to its highest level since 2011, while Zinc has touched the highest level since 2007. Rally this week has pushed the price of lead past $2500 per ton, a level not seen since September 2011. While the price of lead has touched these levels twice; once on 2013 and once after the election of Donald Trump, and it has never closed at these levels since 2011.

Lead is riding on speculations that current nationalism would drive greater demand for the metal. A supply crunch is also contributing to the rise along with China’s decision to review scrap imports. Though currently, China is reviewing scrap imports of copper, there is an ongoing speculation that the probe might extend to other metals. In addition to that, President Trump stressed that week that he intends to keep his promise of $1 trillion infrastructure spending.

It can be seen in the chart that Lead has broken an important congestion area that has been in place since last December. After an interim bottom in June, the Lead price has increased by more than 17 percent and we expect the rally to continue further. We expect the price of lead to reach as high as $2850 per ton with an interim target around $2700 per ton area. Lead is currently trading at $2410 per ton.

 

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