North America Lead Market Seen by Doe Run in Slight Deficit

The North American lead market will have a “slight deficit” next year after a “small surplus” this year, according to Jose Hansen, vice president of sales and marketing at Doe Run Co., owner of six mines in Missouri.

Doe Run’s Herculaneum smelter in Missouri will close Dec. 31, pushing the market into shortage next year, Hansen said in an interview in London today. Premiums for lead in the U.S. doubled this year in anticipation of the closing, and are now about 10 cents to 13 cents a pound, he said. He declined to comment on premiums for next year. Supplies from Canada and Mexico will help to fill the gap in the U.S., he said.

Stockpiles of lead, 80 percent of which goes into batteries, are contracting the most of any industrial metal traded on the LME just as global car sales are expanding. Production will lag behind demand by 23,000 metric tons next year, the first shortage since 2009, the International Lead & Zinc Study Group, which represents consumers and producers and is based in Lisbon, said in a statement today.

“This year we’re going to see demand grow 5 to 6 percent globally and we are seeing new applications in automobile applications,” Hansen said. “I’m very positive on lead demand.” Lead demand is also getting a boost from industrial batteries needed to support faster Internet services, he said.

Doe Run, based in St. Louis, has six mines, and two smelters, all in Missouri. Its refined lead production will drop to about 145,000 tons next year from 260,000 tons this year, he said. Doe Run is exploring ways to boost production outside of Missouri and has a demonstration plant in Missouri that may be able to produce primary lead, silver, zinc and copper, he said.

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