Lead’s premium to zinc dropped to the lowest level this year in London after Glencore International Plc restarted lead output at its smelter in Italy.
Lead for delivery in three months was $256 a metric ton higher than zinc by 4:36 p.m. on the London Metal Exchange. A settlement at that level would be the lowest since Dec. 31, data compiled by Bloomberg show. The gap reached $314 a ton on Jan. 24, the highest since July 2011.
Glencore has resumed lead output at the Portovesme smelter, which has a capacity of 80,000 metric tons a year, according to a person familiar with the matter. Stockpiles of lead tracked by the LME have dropped 9.5 percent this year, while zinc inventories are down 1.9 percent. Lead is mostly used in car batteries and zinc is mostly used to rust-proof steel.
Global steel production will climb 4.7 percent this year, compared with 1.4 percent growth last year, according to MEPS (International) Ltd. Crude steel output this year is estimated at 1.62 billion metric tons, Sheffield, England-based MEPS said in a report on its website today.
Lead for delivery in three months slid 1.5 percent to $2,424 a ton on the LME, trimming this year’s gain to 3.9 percent, and zinc fell 0.4 percent to $2,168.50 a ton, bringing its gain to 4.2 percent.