Lead prices fell 10% during the past 2 months. Lead prices are now at the lowest levels since 2012 after falling sharply like the rest of the industrial metals in the face of a rising US dollar.
Most analysts agree that lead’s fundamentals are bullish as the market is expected to move further into deficit. However, our view differs from them. Although it might be true that the fundamentals could be improving, it is hard to tell what has already been discounted in the price.
What we can see is that commodities and industrial metals remain in bearish mode and that is weighing down lead prices. Despite the good performance of lead in the first half, the second half of the year is proving that lead prices are not able to significantly rise while investors are not pooring money into the commodities market.
What This Mean For Metal Buyers
Lead prices are challenging a support area that, if broken, we should expect more on the downside. Prices might rise in the short-term, as they appear to be oversold, however, the long-term outlook doesn’t look too positive in the face of a bearish commodities market.
by Raul de Frutos