Changing trends of Lead in global market

Transcription

1 Changing trends of Lead in global market Engineering, electrical and electronics, infrastructure, automobile and automobile components, packaging etc. are key industries of global economy and majority of their requirements are met through the nonferrous metals industry comprising of zinc, nickel, tin, lead, copper, aluminium etc. This report focuses on lead- which is monopolistic in nature as compared to zinc industry which is duopolistic in nature, its growth in mine production over the years, major influence of price and its versatility. Metalworld Research Team Business Talk Lead-Global Scenario Global mine production of lead concentrate increased by about 7 continued percent in Whereas in 2007, to be the dominant domestic lead mine production of source of recoverable lead recoverable lead was 434,000 metric scrap, accounting for 93 percent of all tons, an increase of 4 percent lead produced from secondary compared with that of Alaska sources. U.S. lead mine production in and Missouri were the dominant 2006 decreased slightly from that of producing states with a 92 percent 2005 to about 430,000 tons, and share. Other appreciable lead mine production of secondary refined lead, production was in Idaho, Montana, and mostly derived from spent lead-acid Washington. Domestic secondary batteries, was unchanged so exports production of refined lead was (lead in concentrates) decreased 29 increased by about 2 percent in percent, and imports of refined metal Secondary lead accounted for 91 increased 16 percent, resulting in an percent of domestic lead refinery increase in U.S. apparent consumption production compared with 88 percent of lead of about 10 percent. in Lead-acid batteries 13

2 Table 1: World Refined Lead Supply and Usage for tons /2009 Jan-Feb Nov Dec Jan Feb Mine Production Metal Production Metal Usage In 2008, global production of refined U.S. and world markets. The main lead was expected to be 7 percent driver behind the growth, as it had higher than that of the previous year, been for several years, was higher use owing to production increases in in China for vehicle fleet expansion, Australia, Canada, China, Kazakhstan, production of automotive batteries for the Republic of Korea, Malaysia, the e x p o r t, a n d i n v e s t m e n t i n United Kingdom, and the United telecommunications and information States. China continued to be both the technology. European lead use largest producer and consumer of decreased by about 2 percent. Global refined lead in the world. The Chinese mine production increased by trade balance for refined lead has approximately 4 percent in The shifted during the past year as a result world refined lead production in 2005 of export tax increases that were was approximately 1 percent less than implemented in Chinese exports world consumption, and a minor of refined lead declined by more than production deficit was forecast to 20 percent during the first half of 2008 continue into U.S. lead mine compared with those of the same production in 2005 decreased by about period of the previous year. 1 percent compared with production in Conversely, Chinese exports of lead Production of secondary refined acid batteries, which are not subject to lead, mostly derived from spent leadthe higher export taxes, have acid batteries, decreased by about 1 increased in 2008 compared with p e r c e n t, a n d U. S. r e p o r t e d those of the previous year. The value consumption of lead increased by of recoverable mined lead in 2008, about 4 percent. Through the first half based on the average U.S. producer of the year, there was a significant price, was $1.23 billion. Mine increase in shipments of original production rose in Bolivia, Canada, equipments and replacement SLI China, India, Mexico, and Russia owing batteries. The lead-acid battery to new projects coming online, along industry recycled a little more than 99 with expansions at some existing percent of the available lead scrap operations. As compared to 2005, the from spent lead-acid batteries during price of refined lead increased in the the period 1999 through Source : ilzsg.org The main driver behind the growth, as it had been for several years, was higher use in China for vehicle fleet expansion, production of automotive batteries for export, and investment in telecommunications and information technology. 14

3 Five lead mines in Missouri, plus leadproducing mines in Alaska, Idaho, Montana, and Washington, yielded most of the total. Primary lead was processed at one smelter-refinery in Missouri. Out of 21 plants that produced secondary lead, 12 had caulking lead; solder; and oxides for ceramics, chemicals, glass, and pigments. The balance was used in ballast and counter weights, brass and bronze, foil, terne metal, type metal, wire, and other undistributed consumption Business Talk Prices Figure 1: 5 year Lead spot prices The ongoing economic growth in emerging industrialized nations such as China and India drove strong global demand for lead in annual capacities of 15,000 tons or Lead prices continued the trend that more and accounted for more than 99 had begun in 2006 and increased percent of secondary production. Lead throughout the first three quarters of was consumed at about The ongoing economic growth manufacturing plants. The lead-acid in emerging industrialized nations battery industry continued to be the such as China and India drove strong principal user of lead, accounting for global demand for lead in This, 88 percent of the reported U.S. lead coupled with the supply disruption at a consumption for Lead-acid major lead mine in Australia, drove batteries were primarily used as lead prices to historically high levels starting-lighting-ignition (SLI) in Lead price increases typically batteries for automobiles and trucks. have been passed on to consumers by Lead-acid batteries were also used as manufacturers because there were i n d u strial-type b a t t e ries f o r very few suitable substitutes for lead u n i n t e r r u p t i b l e p o w e r - s u p p l y in the production of SLI and industrial equipments for computers and batteries, which were its primary telecommunications networks and uses. During 2007, the average price h o s p i t a l s ; f o r l o a d - l e v e l i n g of refined lead rose appreciably from equipments for commercial electrical that of 2006 on both the U.S. and world power systems; and as traction markets, approaching record highs. batteries used in airline ground Consistent with this rise in price, the equipment, golf carts, industrial global supply situation for refined lead forklifts, mining vehicles, etc. About remained tight, as stocks continued to 10 percent of lead was used in decline and demand remained strong. ammunition; casting material; pipes, Use of lead worldwide was estimated sheets (including radiation shielding), to have increased by 4 percent in traps and extruded products; building Continued strong economic construction, cable covering, and g r o w t h i n t h e a u t o m o t i v e, telecommunications, and information 15

4 technology sectors in China was the on exports of refined lead, leading to most significant factor influencing significantly decrease such exports. increased lead usage. Automobile As a result, an appreciable shortage of sales alone in China were increased by refined lead was evident on the world an estimated 25 percent during market during Increases in Also contributing to the increase in refined lead production were begun in worldwide lead demand were notably China, India, and some European stronger economies continuing to countries in order to more closely emerge in other areas of Southeast meet the rising demand for refined Asia, particularly India, as well as lead. U.S. mine production of lead in many of the countries in Eastern concentrate remained steady during Europe. Global mine production of lead 2007, as did production of secondary concentrate increased by about 5 lead that was sourced principally from percent in However, Chinese recycled spent lead-acid batteries. net imports of lead concentrate rose The average LME cash and North significantly during the year, affecting American producer prices in 2007 the supply of concentrate on the world were up by $0.585 per pound (102 market. Increases in lead concentrate percent) and $0.464 per pound (60 production are anticipated in China, percent) respectively, from the Europe, and South America to meet average prices of $0.585 per pound the rising world demand. Influenced by and $0.774 per pound, respectively, in the higher domestic demand for lead, Prices for refined lead began to China removed the value-added tax drop in the second half of 2008 and rebate and imposed a 10 percent tax continued to decline until year end, Chinese net imports of lead concentrate rose significantly during the year, affecting the supply of concentrate on the world market 16

5 Use of lead worldwide was estimated to have increased by about 5 percent in 2008, driven primarily by strong economic growth in the information technology, telecommunications, and transportation sectors in China reflective of global demand that price of refined lead continued to weakened during the same period. increase in the U.S. and world The average North American markets. The average North American producer and London Metal Exchange Producer and LME prices through cash prices in September were nearly October were cents per pound 30 percent lower than they were at the and cents per pound, beginning of Use of lead respectively. These averages worldwide was estimated to have increased 25 percent from the average increased by about 5 percent in 2008, prices for Estimated world use driven primarily by strong economic of lead again increased by 3 percent to growth in the information technology, 4 percent in Much of the growth t e l e c o m m u n i c a t i o n s, a n d was attributed to increased production transportation sectors in China. of SLI and industrial batteries in China. During 2005, the price of refined lead Growth also was attributed to increased in the U.S. and world increased manufacture of SLI markets. The average North American batteries for automobiles and producer and London Metal Exchange i n d u s t r i a l b a t t e r i e s f o r t h e prices for the first 9 months of the telecommunications and information year were cents per pound and technology industries. Global mine cents per pound, respectively. p r o d u c t i o n i n c r e a s e d b y These averages represent a 10 approximately 1 percent in percent and a 7 percent increase, respectively, from the annual average prices for Estimated world use of lead rose by between 3 percent and 4 percent in During 2006, the 18