Lead Prices Rise 17-Month High on Global Supply Concerns

Lead prices rose to a 17-month high on signs of lower global output from mines amid increasing demand for the metal used in car batteries.

Consumption will exceed output by 279,000 metric tons this year, Morgan Stanley estimates. Ford Motor Co. said last week it will introduce 23 new models worldwide this year. The carmaker’s sales in China jumped 35 percent in the first half of the year.

“Expectations are for future mine production to be limited, with large-scale mines coming off line and only really tiny scattered mines to replace them,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “The market is finally warming up to the idea that supply is going to be lagging demand.”

Lead for delivery in three months jumped 1.5 percent to settle at $2,301 a ton at 5:53 p.m. on the London Metal Exchange, the biggest gain since July 2. Earlier, the price reached $2,303, the highest since Feb. 28, 2013. The metal headed for the largest monthly increase this year.

“We expect slower medium-term mine supply growth to tighten global supply,” Morgan Stanley analysts including Joel Crane said today in a report. “We believe this outlook is yet to be factored into lead prices.”

Copper fell 0.1 percent to $7,120 a ton ($3.23 a pound) on the LME. Aluminum, zinc and tin gained as nickel dropped.

On the Comex in New York, copper futures for September delivery rose 0.1 percent to $3.2435 a pound.

Before it's here, it's on the Bloomberg Terminal.