Lead hits 2-week high on tight supplies


LONDON: Lead prices hit two-week highs on Monday as worries increased about tighter supplies amid China's environmental crackdown, strong demand and falling inventories in Shanghai.
The benchmark lead contract on the London Metal Exchange was untraded in official rings but bid up 1.4 percent at $2,393 a tonne, a gain of around 18 percent so far this year. Prices earlier touched $2,408, their highest since Sept. 4.
"Some of these environmental inspections in China are hitting lead more than other metals because of its toxic qualities," said Macquarie analyst Vivienne Lloyd. "North Korean concentrate exports to China have been stifled because of the sanctions ... There has been a reduction in availability."
CHINA ENVIRONMENT: China's Ministry of Environmental Protection (MEP) last month embarked on its fourth round of environmental inspections across eight provinces and regions, including Shandong.
SICHUAN: Chinese research firm Antaike said the start of environmental inspections in Sichuan province had caused 60 percent of local lead-zinc mines to shut down for month-long maintenance. That could mean lower supplies of zinc and lead in August and September.
DEMAND: "Demand strength is holding up well everywhere," said Farid Ahmed, lead analyst at consultants Wood Mackenzie. "On the supply side, primary smelters are very concerned about concentrate availability, compounded by scrap batteries still being tight in North America and China for lead recyclers."
SUPPLY: More than half of global lead supplies come from secondary or recycled sources, which analysts say cannot make up for losses from primary or mine supplies.