The largest producers of mined lead are China, Australia, and the USA, whereas the largest producers of recycled lead are the USA, China, and Germany. China alone accounts for about 60 percent of all lead production.
As well as producing 60% of the lead, China also uses over 40% of the annual global supply of lead and, therefore, is the biggest driver of its price. Strong growth in Chinese GDP over the past two decades had pushed many industrial commodity prices higher.
However, Chinese GDP has slowed down in recent years, creating doubts about future demand for all industrial metals including lead. Ultimately, lead prices depend specifically on Chinese demand for batteries and power storage devices.
As industrialisation and urbanisation expands in China, the demand for power sources will grow, and this should boost lead prices.
An analysis of the lead market must focus on the battery industry, which accounts for about 85% of lead demand. Government data from both emerging and developed economies suggests that demand for energy is expected to double in the next decade.
To meet this demand, China and India have started investing in smart grid technology. These investments have led to expanded use of lead-acid batteries in electric and hybrid vehicles.
Furthermore, as demand for renewable energy increases, the need for sustainable and cost-effective energy storage increases as well. The lead battery industry’s circular economy helps create an extremely sustainable, environmentally friendly form of energy storage that produces significant economic benefits for the communities where we operate,” said Jeff Elder, president of BCI.
The increasing demand for energy storage in renewable energy facilities, as well as lead batteries’ essential uses in the nation’s infrastructure that encompasses transportation, logistics, communications and critical backup power, produces a direct economic output of $11.2 billion from their manufacture and recycling.
Primary lead production requires large amounts of energy. Blast furnaces require coal and electricity. Mining facilities demand electricity and crude oil to operate. As the world consumes more energy, prices should rise in the coming decades. These rising costs should make lead more expensive.
However, a global spike in interest rates or a global recession could depress automobile and battery demand.
Just like tin, investing in lead is a way to bet on a weak US dollar and higher inflation. Lead is priced in US dollars, so the performance of the American economy can impact its price.
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