LONDON, Aug 17 (Reuters) – Lead has been an unlikely and unforeseen beneficiary of the North Korea missile crisis. A new round of U.N. sanctions includes North Korean exports of lead concentrate. China, which signed up to the U.S.-drafted resolution, will lose an increasingly significant flow of raw materials to its lead smelters.
The news has reinvigorated a market that had lost its bull narrative thread. London Metal Exchange (LME) lead for three-months delivery hit a nine-month high of $2,537 per tonne on Thursday morning.
Not as exciting as zinc, which has just surged to its highest level in over a decade. But being overshadowed by its more glamorous sister metal is nothing new for lead. Characterised by a lack of statistical clarity and only sporadic news flow, lead tends to get regularly punished on the London market in the form of the popular relative value trade against zinc.
The sanctions news, however, has refocused attention on the state of China’s lead market. But is it tight or is it sufficiently well supplied to absorb the loss of North Korean material?
NORTH KOREAN CONCENTRATES TO CHINA
China imported 108,000 tonnes of lead concentrates from North Korea least year, making its neighbour the fourth largest supplier after the United States, Russia and Peru. Imports in the first half of this year totalled 64,000 tonnes, making North Korea the second-largest supplier after Russia.
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