Lead Needs a Jump Start

Much of what ails lead—most notably its environmental and health drawbacks—has been well documented. Nonetheless, lead batteries remain a mass-produced item, and if more batteries are bought and sold, lead pricing might perk back up.

That’s the opinion of presenters at the ISRI (Institute of Scrap Recycling Industries Inc.) Commodity Roundtables, taking place this week in Chicago.

Carl Fischer of RSR Corp., Dallas, noted that lead is currently trading at 18.8 cents per pound based on LME pricing, down yet further from last year’s 22.2 cents per pound price.

Nonetheless, continued demand for lead-acid batteries (which consume 75 percent of lead used) will ultimately lift lead back up, says Fischer. “We’re a culture that doesn’t adapt well to change,” Fischer says of the use of alternative battery materials. “The lead price is depressed, but it’s tough to substitute metals and still compete at a lower price.”

Andy Roebuck of Teck-Cominco, Toronto, says the lack of interest in lead may ultimately help cut supply and bring pricing back up. “There really aren’t enough lead concentrates to go around,” says Roebuck. “And there’s no one out there going out looking for lead.”

Conditions on the smelting side are similar, where Fischer notes that not only is it nearly impossible to site a new lead smelter, but, “It’s very difficult today to expand production at an existing one.”

Statistics presented by Roebuck show lead concentrates inventories being drawn down recently, while finished refined lead will be in an undersupply situation in 2003.

Among the reasons demand for lead recently has been weak are mild winters decreasing the need for replacement auto batteries and a slowdown in the production of new telecommunications equipment powered by batteries.

But if the winter of 2002-2003 proves a severe one—or if new automobile or new telecommunications equipment orders spike upward—some charge might finally return to lead pricing.