Lead Update: Downside Risks To Average Price of US$2,300/tonne In 2010

Core View: The recent decline in risk appetite and the concomitant sell-off in markets, has prompted us to downwardly revise our average price forecast for lead prices in 2010. We now anticipate lead will average US$2,300/tonne in 2010, down from out previous forecast of US$2,400/tonne. That said, we have left our average forecast of US$2,500/tonne unchanged in 2011. Three-month lead is currently trading at US$1,935/tonne, and we do not rule our further downside pressure on prices. Furthermore, according to the International Lead & Zinc Study Group (ILZSG), the global lead market was in surplus to the tune of 58,000 tonnes in the first eleven months the year, which should tame upside pressures to lead prices in the short run.

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