Lead hits record high

Stranded shipments at Aussie port, China's export tax push up the metal on LME.

Lead hit a fresh record high on Thursday at $2,300 a tonne, up by 5.2 per cent or $110 from its previous close on Wednesday, owing to supply concerns even as 9,000 tonnes of the metal was stuck in the Australian port of Esperance.

It would take at least another month or more before 9,000 tonnes of lead stalled at the Australian port could be cleared for export, Magellan Metals said earlier this week.

The rise is also partly attributed to a mere 100 tonnes of decline in inventory. "Although a 100 tonnes decline does not make major material sense, the significant thing is that there are no fresh additions," said a local trader.

Traders from across the world poured in their fresh orders to ensure supplies of the metal as the International Lead and Zinc Study Group (ILZSG) showed a global deficit of 38,000 tonnes in the January-March period.

A fresh round of supply uncertainty prevailed in the base metals market in the wake of the news of a further delay in the lead exports from Esperance, owing to more soil tests on the cards. Canada's Ivernia shut down its Magellan lead mine and declared force majeure on shipments after exports from Esperance were stopped on March 12 following the death of some 4,000 birds, possibly caused by lead poisoning.

Besides, the introduction of a 10 per cent tax on Chinese exports of unwrought refined lead from June 1 also supported the price rise as it could sharply cut supplies from the world's biggest producer. China's lead smelting capacity is expected to reach 3.9 million tonnes a year by 2010, an increase of 1.04 million tonnes from 2005.

China's estimated refined lead production is likely to increase up to 2.95 million tonnes in 2007 compared with 2.68 million tonnes in 2006. Output in 2008 is expected at 3.27 million tonnes and set to rise to 3.57 million tonnes by 2009.

HZL hikes prices: Hindustan Zinc (HZL), the country's largest lead and zinc producer, has raised prices of lead by 5 per cent, effective May 31, to bring the domestic prices of the metal at par with the global rates.

With this revision, the metal is now quoted at Rs 102,300 a tonne compared with Rs 97,500 a tonne after its previous revision on May 26. In its last revision, the Vedanta group company had raised lead prices by 3 per cent to Rs 97,500 a tonne, making it the third consecutive rise in May.

HZL revises its products prices as and when they see dramatic changes on the London Metal Exchange (LME).

Meanwhile, in its fifth consecutive price cut, the metals major has brought down zinc prices by 3 per cent with immediate effect, with the high-grade variety quoting at Rs 166,300 a tonne compared with Rs 171,300 a tonne in the last revision on May 26. Special high-grade zinc at the Chanderia smelter is now sold at Rs 167,300 a tonne, while prime western zinc is quoted at Rs 163,500 a tonne.

Zinc prices on the LME surged by $10 to $3,620 on Thursday from $3,610 on May 25 as the inventory of the metal witnessed a decline of 2,150 tonnes to 75,350 tonnes from 77,500 tonnes on May 25.