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Lead price forecast: What next for the metal?

By  Yoke Wong

Edited by Vanessa Kintu

17:07, 15 July 2022

Lead price forecast: What next for the metal? Lead ingots
Lead ingots Photo: nathapol 993 /

Lead prices fell over the past month as weaker demand amid a looming recession weighed on industrial metals.

The London Metal Exchange’s (LME) benchmark three-month contract closed at $1,824.23 a metric tonne (t) on 14 July, down 12.37% from a month ago. Lead prices have been on a downtrend since March 2022 as global consumption for the metal was expected to fall because of lower demand caused by the slowing global economic growth.

Lead prices hit a four-year high in early March as demand for industrial metals was buoyed by the post-Covid-19 economic recovery in the fourth quarter of 2021. The three-month LME lead contract hit a four-year high at $2,535/t on 7 March, but prices fell as China imposed new lockdowns in Shanghai in late March to combat the rising number of Covid-19 cases in the city.

China is the world’s largest consumer of refined lead, accounting for 40% of global demand. Lockdown in the Chinese financial hub of Shanghai severely affected demand and market sentiment for all industrial metals, causing prices to fall.

As Beijing maintains a zero-Covid policy, “investors remain wary about demand in China as a new COVID-19 variant threatens to dampen consumer spending and construction activity,” Daniel Hynes, senior commodity strategist at ANZ Commodity, wrote on 13 July

Additionally, the World Bank and analysts anticipated recessions across many countries in the coming months. The contracting global economic growth could cut demand for lead. This has further dampened demand outlook for the metal and led some analysts to have bearish lead price forecasts.

Are you interested to learn more about the lead market? Read on for analysts’ market outlook and the latest lead price predictions.

Global lead supply

According to data from industry body International Lead and Zinc Study Group’s (ILZSG) published on 23 June, global refined lead production in January 2022 to April 2022 decreased to 3.97 million tonnes, down 2.8% year-over-year (YOY) from 4.08 million tonnes.

“A 2.8% reduction in global lead metal production was mainly the result of lower output in China, Germany, the Republic of Korea, Ukraine and the US,” said ILZSG.

Global consumption for lead in the first four month this year also fell to 3.95 million tonnes, a drop of 2.7% YOY.  

ILZSG cited lower usage in Brazil, India, Japan, the Republic of Korea, Mexico, Taiwan, Thailand and Turkey to be the key factor in the overall drop in global consumption for the period.

In contrast, overall demand in Europe grew by 3%, driven by increased usage in

“the Czech Republic, Germany, Greece and the UK, that were partially balanced by reductions in France, Italy, Poland and Ukraine.”

Global lead metal in surplus in 2022

ILZSG forecast that refined lead metal supply could rise to 12.44 million tonnes in 2022, up 1.3% from the previous year. The increase was primarily driven by higher production in China, India, Kazakhstan and Mexico.

Lead metal consumption was expected to rise by 1.7% YOY to 12.42 million tonnes this year. The usage growth in 2022 was forecast to slow considerably from last year, which increased by 4.1%.

“In general, demand from the battery replacement market has underpinned global lead usage in most regions of the world and has helped to offset a downturn in shipments of original equipment batteries, which have been negatively impacted by reductions in automobile output, resulting from logistics issues and a shortage of semiconductor computer chips,” said ILZSG.

Amid rising output and slower consumption, ILZSG expects the global supply of refined lead metal to exceed demand by 17,000 tonnes in 2022.

Lead demand falls as switch to EV accelerates 

Lead is mainly used for the manufacturing of lead-acid batteries, which accounted for 86% of the metal consumption worldwide in 2019, according to Statista. The other end-uses of lead are for rolled and extruded products, alloy, solder, lead oxides, shot and ammunition. 

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istribution of lead consumption worldwide, 2019

Lead-acid batteries are mainly used to power internal combustion engines (ICE) in vehicles and air crafts. As the global decarbonisation trend accelerated over the past year with increased motorists switching to battery electric vehicles (BEV), the slowing sales of ICE vehicles have also reduced lead-acid battery demand.

In its quarterly metals report in May, LME broker Sucden said:

“Shanghai reported car sales of 0 in April; this outlines the demand side of vehicles in China. Rest-of-World consumption is also weak, with production lagging due to shortages of materials; as consumers shift towards BEVs, we will see a shift away from ICE vehicles.”

While many analysts believed the decarbonisation trend could likely cut lead demand in the longer term, the World Bank believed the short-to-medium trend could be supported by replacement battery use and auxiliary electric vehicle (EV) functions.

In its Commodity Markets Outlook in April, the World Bank said: 

“Global lead demand is expected to rise in the medium term, due to steady new vehicle and replacement battery use, as well as the utilisation of lead batteries in EVs for auxiliary functions.”

Lead price forecast: Analysts’ predictions

Lead 5-year price chart

Sucden’s lead price forecast for 2022 expected the average lead metal prices in a range of $2,000 to $2,250/t this year. The broker also pointed out that despite rising production, supply in Europe and the US was expected to remain tight because of logistic issues.

In April, the World Bank’s lead price forecast remained supported by the near-term demand of battery replacement and EV auxiliary functions, but the economic body remained wary of the uncertainty caused by the supply-chain disruption in the automotive industry. 

“Lead prices are projected to increase modestly in 2022 before easing in 2023. Risks to the outlook are tilted to the downside both in the short term, given constraints in the auto industry, and over the longer term, from a possible phase-out of auxiliary lead batteries,” said the World Bank.

In early June, the World Bank published its observation that lead prices have remained elevated despite falling car production, which is in contrast with the trend in the past five years.

Lead prices and car production in major markets

In contrast, financial data and forecast provider Trading Economics lead price forecast was more bearish. It expected lead prices at $1,891.65/t by the end of Q3 2022, and the metal could fall to $1,780.46 in twelve months’ time.

Statista predicted the average lead prices at $2,100/t in 2022, $2,000/t in 2023, $2,008 in 2024, and its lead price forecast for 2025 was marginally higher at $2,016/t.

Due to the volatility and uncertainty caused by the Ukraine-Russia war, many analysts have only issued short-term price forecasts and refrained from giving longer-term lead price forecasts for 2030.

Note that analysts’ forecasts can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.


Is lead a good investment?

Lead will likely continue to be used in batteries but analysts such as the World Bank and Sucden predicted its overall consumption volume to fall in the long term. 

Whether lead is a good investment for you depends on your investing goals and portfolio composition. You should do your own research and never invest what you cannot afford to lose.

Will lead go up or down?

No one can say for sure. Whether lead prices will rise or not will depend on a number of factors, including the metal’s supply and demand, interest rates and the strength of the US dollar (USD).

Should I invest in lead?

The lead market is expected to be volatile amid demand uncertainty. Only you can make the decision on whether to invest in lead or not. This will depend on your investing goals, risk tolerance and portfolio composition. You should do your own research and never invest what you cannot afford to lose.

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