Lead futures prices on the Multi-Commodity Exchange of India (MCX) are expected to remain weak on rising global production, falling demand and rising stockpiles at the London Metals Exchange (LME). MCX September futures fell nearly 12% over the past one month, while London prices dropped by nearly 20% during the second quarter of 2008. However, MCX Lead September prices on Thursday moved up by Rs 3.10 per kg or 3.94% to trade at Rs 81.75 per kg till 5.00 pm following the firm London markets, as cancelled warrants indicate demand in the physical market and support the metal. ?London lead futures surged to more than 3% as increasing cancelled warrants offset a substantial rise in inventories,? an analyst said. ?In the third quarter of 2008, prices are likely to decline amid higher stockpiles and will show no clear sign of demand recovery,? he said.
Global lead mine production in 2008 is forecasted to increase by 8.4% to 3.91 million tonne in 2008, according to the International Lead and Zinc Study Group.Global growth is expected to slowdown in the second half of 2008 and this was further dampening demand prospects for the metal, market sources said.
Lead lost substantially in the second quarter of 2008, with prices averaging $2,330 per tonne, 19.6% lower than the average price level in the first quarter of 2008. Prices were seen moving lower as inventories recorded a huge build-up of over 107% in the second quarter alone. ?This, coupled with lower demand, kept prices under pressure. We expect prices to average $2,250 per tonne in2008,? an analyst with Karvy Comtrade said.