December 6, 2019: The current LME price of around $1,900/tonne for lead looks to remain in that area for the first two quarters of 2020, economist and policy commentator Guruswamy Chandrashekhar told the opening session of the International Lead and Zinc Development Association conference on December 2. He predicted a range of $1,900-$2,100 a tonne.

A 55,000-tonne surplus of lead was predicted for 2020 with the auto sector ‘on life support’, had already caused a drop in prices of 10% in November.

The global economic slowdown, uncertainty over Brexit and the US/China trade war were all having an impact on the auto sector, which would influence battery and lead consumption, he said, leading to a lead surplus in 2020. Relations between the US and China are likely to deteriorate further following the US president’s recent law backing Hong Kong protesters.

However the rise in start-stop demand would offset the decline in conventional vehicle sales, which meant that consumption and production would be fairly well balanced, he said.

“Governments are taking action and providing incentives for a revival, but will that be enough?” he asked.

“There are strong indications that the lead market will move to a surplus in 2020/21, contrary to earlier expectations that there would be a deficit of 46,000 tonnes in 2019 because of declining output in Argentina, Australia, Canada and China,” said Chandrashekhar. “That led to a sharp rise in LME prices to about $2,240 a tonne, the highest since July 2018.”

But despite these growth concerns, economists are still predicting a global GDP growth of 3.1% for 2019, and or 2020, 3.4%, he said. “Commodity markets always look ahead, and react today on predictions of what will happen in the future.”