LONDON (Dow Jones)--The global refined lead market moved into a 170,000-metric-ton surplus in the first nine months of 2011 as strong supply growth in China, Australia, Germany and the U.S. continued to outstrip growth in demand for the metal, data from the International Lead and Zinc Study Group showed Wednesday.
According to the ILZSG, total refined production reached 7.631 million tons in January through September. Consumption, meanwhile, only totaled 7.461 million tons, the ILZSG said.
In the first three quarters of 2010, the market was in a surplus of just 57,000 tons, said the ILZSG, an intergovernmental forum based in Portugal and established to increase metal market transparency.
China, which accounts for almost half of the world's refined production, posted a 14% jump in output at 3.374 million tons. Chinese zinc usage, while also up strongly on the year, fell short with growth of 12%--taking total demand to 3.319 million tons.
Battery production accounts for 75% of China's total lead consumption, and with estimates suggesting the country will produce about 20 million battery-powered electric bikes annually, and has around 120 million already on the road, there is sustained demand for refined lead, analysts and traders say.
In addition to growth in China, the overall increase in refined lead metal supply was helped by increases in Australia, Germany and the U.S., which "more than compensated" for declines in Japan and the U.K., the ILZSG said.
Together with the U.S., China was also "the primary influence" on the rise in lead demand this year, it added. Demand in the U.S. was up 10%.
Meanwhile, European usage increased by a more modest 1%, the ILZSG said.