LONDON, Oct 18 --The global refined lead market is forecast to generate a surplus this year and an even larger one next year as new operations and capacity expansions boost supply at a faster rate than demand, data from the International Lead and Zinc Study Group showed Monday.
ILZSG expects the global refined lead metal market will generate a 108,000 metric tons surplus in 2012 and a 174,000 ton surplus in 2013.
Global demand for refined lead metal is forecast to rise by 3.4% to 10.80 million tons this year and a further 3.3% to 11.15 million tons next year, reflecting a rise in demand for the product used in the production of batteries where China is the largest consumer.
"In China, lead-acid battery production and exports have recovered strongly after the wide-ranging environmentally motivated cutbacks in 2011 and lead metal usage is expected to grow by 4.8% this year and 4.7% in 2013," the group said.
European demand is expected to be hit by declining automotive sales and to remain flat in 2012 before increasing by 1.2% in 2013, the group said.
On the supply side, global refined lead metal output is forecast to rise 2.9% to 10.90 million tons in 2012 and 3.8% to 11.32 million tons in 2013 following the opening of both new capacity and the reopening of capacity placed on care and maintenance in recent years.
This includes the expected reopening of the La Oroya operation in Peru and Glencore International's (GLEN.LN) Kivcet plant in Italy, the expansion of Kazzinc's UstKamenogorsk plant in Kazakhstan, the opening of secondary operations in Florida and South Carolina in the U.S. and the commissioning of new capacity at a number of plants in China, the group said.