Lead price spikes on Aussie smelter outage

Lead prices touched a two-week high overnight after Belgium-listed Nyrstar said it had stopped production at its Port Pirie smelter in Australia, raising fears of shortages of the metal mainly used in car batteries.

The stoppage is the second this year at the lead smelter and follows an outage in June and July when 30,000 tonnes of metal were lost in the 12 million tonne market.

Benchmark lead on the London Metal Exchange (LME) touched its highest since July 26 at $US2,101.50 per tonne but closed 0.2 per cent lower at $US2,065.

“There is uncertainty on when the smelter will be back up and running on a reliable basis and this should support prices,” said Capital Economics Senior Commodities Economist Ross Strachan.

“But it’s still fairly gloomy on the economic background with the trade war,” Strachan said, adding this could cap gains in base metals.

During the first five months of the year, the global lead deficit increased to 42,000 tonnes from 34,000 tonnes in the same period last year, according to the International Lead and Zinc Study Group.

Inventories of lead at LME-approved warehouses fell 800 tonnes to 82,475 tonnes, having jumped about 50 per cent since hitting their lowest since 2009 three weeks ago.

Low inventories have created a premium for cash nickel to the three-month contract, which by Friday stood at about $US14 a tonne, although this was down from nearly $US30 on Thursday .

Shortage concerns are exacerbated by one entity holding between 50 per cent and 79 per cent of LME warrants.

The economic outlook has deteriorated in all parts of the world over the northern summer due to an escalating trade dispute between the United States and China, a survey showed on Monday.

On Friday, US President Donald Trump said he was not ready to make a deal with Chinese authorities and even called a September round of trade talks into question.

Sales of new energy vehicles in China fell 4.7 per cent in July from a year earlier, the first drop in more that two years, data from the country’s biggest auto industry association showed.

Nickel finished 1.0 per cent higher at $US15,710 a tonne, after hitting a 16-month high of $US16,690 last week on the possibility of Indonesia bringing forward a ban on mineral ore exports.

Indonesia aims to speed up enforcement of a ban on mineral ore exports due to come into force in 2020, news website Detik.com quoted co-ordinating minister for maritime affairs Luhut Pandjaitan as saying.

Copper closed 0.2 per cent lower at $US5,742 per tonne while aluminium was unchanged at $US1,771.

Zinc gained 2.0 per cent to $US2,278 after touching a three-year low while tin closed down 0.4 per cent at $US16,825 after also touching a three-year intraday low.

AAP

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