Lead climbs to two-week high on winter demand, China


By Eric Onstad

LONDON, Dec 1 (Reuters) – Lead climbed to the highest in more than two weeks on Friday due to concerns about supply on the back of pollution inspections in China during a period when seasonal demand for the metal in batteries increases.

Most other industrial metals also rose, supported by strong manufacturing data in much of Asia and Europe.

Lead production in China is expected to be hit by a crackdown on smog after authorities have ordered the shutdown of polluting facilities.

“We’re hearing that there’s a lot more inspections, monitoring and maybe some temporary shutdowns, generally constraints on lead producers,” said Robin Bhar, head of metals research at Societe Generale.

The peak demand period for lead, mainly used to make batteries, is the winter when freezing weather causes battery failures.

“Fundamentally, if you’re looking for a seasonality play, lead would be number one, maybe getting a demand boost from a colder winter than people expected,” Bhar added.

* LEAD: Benchmark lead was the best performer on the London Metal Exchange, rising 1.5 percent to $2,506 a tonne by 1050 GMT, the highest since Nov. 14.

* LEAD SPREADS: Cash LME lead moved to a 50 cent premium over the benchmark three month contract, indicating tightness of nearby supply, compared with a discount of $12.50 on Tuesday.

* FACTORIES: The wider base metals complex got a boost after data showed Asian major manufacturing economies saw their fastest expansion in factory activity in years last month, while euro zone factories had their busiest month for over 17 years in November.

* COPPER: Three-month LME copper rose 0.2 percent to $6,770 a tonne after trading flat in the previous session.

* ALUMINIUM: LME aluminium rose 0.5 percent to $2,059 a tonnes. “Whilst the order book was net better offered, buyers emerged as the net aggressors on the day,” said Alastair Munro at broker Marex Spectron.

(Reporting by Eric Onstad; Editing by Mark Potter)

Sorry we are not currently accepting comments on this article.

Leave a Reply

Your email address will not be published. Required fields are marked *