Lead prices on the London Metal Exchange will be seen up from September onwards due to increased demand from the automobile sector and China, analysts said.

 

The metal has been witnessing a weak trend for the last few weeks. ¡°Fundamentally, lead is strong. So, the prices are bound to move up in the coming months,¡± said Sahil Arora, analyst, Ventura Commodities.

 

Demand for electrical bikes in China ¡ª a major consumer of most base metals including lead ¡ª is expected to go up sharply in the coming months, analysts said. This is likely to push up Chinese demand for lead, they said. The bike sector of China alone consumes nearly 20 per cent of the country¡¯s lead production.

 

"Lead prices may near $2,000 a tonne in the coming months,¡± said a Mumbai-based analyst.

 

Most analysts are of the view that the sharp fall in the prices in the last few weeks was mainly because of speculation. Globally, prices have fallen over 11 per cent from the average July price of $1,947 a tonne.

 

LME lead is likely to find support at $1,530 a tonne and face resistance at $2,350, said P Samson, analyst, Angel Commodities.

 

Auto demand

 

Demand for lead is expected to peak from November onwards mainly because of higher requirement from battery replacement sector, analysts said.

 

"Battery replacement demand usually gathers speed in the final quarter of every year. It is a seasonal demand,¡± Arora said. Nearly 80 per cent of lead produced in the world is used to make automobile batteries.

 

"Though demand for new vehicles in the auto sector is currently subdued, replacement demand is expected to remain firm this year,¡± said a Mumbai-based analyst.

From:Business Standard