Lead at new high on China export tax

Lead rose to a record in London on concern that supply may fail to meet demand this year after China, the world's largest producer, said it will raise export taxes from June 1. Copper and aluminum also gained.

China will charge higher export taxes on 142 products, including lead and zinc, to pare a record trade surplus that's threatening to hurt relations with nations including the US. Lead will be in a deficit for a fifth consecutive year in 2007, the Lisbon-based International Lead and Zinc Study Group said recently.

"The market is concerned that China is going to slow the exports of lead,'' William Adams, an analyst at London-based metals information website Basemetals.com, said today.

Lead rose $100, or 4.7 per cent, to a record $2,210 a tonne on the London Metal Exchange. That took gains in the past three days to 11 per cent. Lead, used in car batteries, has climbed 33 per cent this year, second to nickel in terms of increases among all LME-traded industrial metals. It has the "strongest'' fundamentals of any base metal, Barclays Capital said last month, when the bank raised its lead forecast by 13 per cent to $1,847 a tonne for this year.

The government-funded International Lead and Zinc Study Group forecasts that lead would face a supply shortfall of about 50,000 tonnes this year. Stockpiles of the metal dropped 425 tonnes, or 0.9 percent, to 48,200 tonnes, the LME said today in a daily report. That brought declines in the past 12 months to 54 per cent.