In this guide, we cover some basics about lead as a commodity. We discuss the primary uses of lead and why it’s considered a valuable commodity in commercial industries.
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Why Is Lead Valuable?
Lead is a soft, dense metal with a low melting point. It is an important component in battery production.
Furthermore, lead’s high density and resistance to corrosion make it useful in industries ranging from piping to X-rays.
Brief History of Lead
The history of lead as a component in producing goods traces back to the ancient Egyptians. The early Egyptian civilization used the metal in pottery glazes, soldering components, paints, and piping.
They even cast ornamental objects out of lead. By the 15th century, lead was used as a roofing material for cathedrals and in stained-glass windows.
Where Does Lead Stand as A Commodity Today?
Modern mines produce more than 11 million metric tons of the metal annually. This figure excludes lead produced via recycling.
By the late 1800s, lead-acid storage battery production began.
Main Uses of Lead
Here are the main uses of lead, primarily in commercial sectors:
|Uses of Lead||Description|
|Batteries||The chemical properties of lead make it a mainstay in batteries and storage technologies for renewable energy sources.|
|Protective Shielding||Lead effectively absorbs electromagnetic radiation, so it is vital in creating shields around particle accelerators, X-rays equipment, nuclear reactors and containers transporting radioactive material.|
|Ammunition||The physical properties of lead make it the ideal metal for manufacturing bullets.|
|Sheets and industrial parts||Industrial sheets constructed from lead dampen noise and vibrations.|
How Is Lead Produced?
Two methods are used to produce lead. These are primary production (mining) and secondary production (recycling).
Each method individually accounts for about half of the overall production volume:
The process of primary production involves three steps:
- Ore concentration
Lead Ore Concentration
The first step, then, is to isolate the lead in the ores.
A series of stages called froth flotation breaks down the ores into particles with greater concentrations of lead ore. First, the ore is ground with water into fine sand particles.
The resulting particles are then further diluted with water and chemical detergents and mixed in a series of tanks.
The tanks agitate the mixture, and the lead and zinc particles float to the top, while clay and other silicates sink to the bottom.
What Happens to the Lead and Zinc Particles?
These particles get skimmed off the top, where they are further concentrated. A chemical agent called a depressant is added to a tank with the lead and zinc particles.
This causes most of the zinc ore to sink to the bottom and the lead ore to float to the top.
The lead ore then gets skimmed off. (Additional chemicals, such as copper sulfate, allow the zinc ores to be skimmed off later in the process.)
At this stage, the lead particles skimmed contain between 40 to 80% lead. The remaining concentration contains other particles such as silver, sulfur, or zinc. The particles are now ready to be heated in smelters.
How Does Lead Smelting Work?
To remove the sulfur and other impurities, the lead particles are mixed with other materials including lime and sandstone.
The resulting mixture is spread on a moving grate and heated by air that reaches temperatures of 2,550 degrees Fahrenheit.
This roasting process produces a brittle material called sinter, which is mostly lead oxide but also contains zinc, iron, and silicon oxides.
The sulfur in the concentrate burns away in the form of sulfur dioxide gas.
The sinter is then broken into lumps and loaded into a blast furnace with coke fuel. The coke burns at temperatures of 2,200 degrees Fahrenheit and produces molten lead.
How Lead Is Refined
To be commercially viable, lead must be 99 – 99.999% pure.
The molten lead produces base lead bullion that is 95 – 99% pure. Further refining in drossing kettles removes additional impurities.
After the impurities have been removed and the lead has been cooled, it is cast into blocks that may weigh as much as a ton.
Some refining plants produce lead alloys for specific industrial purposes. For example, adding antimony produces an alloy that is stronger than pure lead.
This makes the product suitable for pipes, sheets, cable sheathing, and ammunition.
Secondary Production of Lead
Secondary production of lead involves recycling items such as batteries.Cable coverings, pipes, sheets, and other metals can also be recycled for lead.
Recycling lead is simple and accounts for half of all lead production. In Europe and the United States, the recycling rate of lead from batteries is 99%.
Smelters separate the components of batteries such as the lead, paste, plastics, and electrolytes (acid). The lead particles are processed in blast furnaces where they are refined for use in new batteries.
Lead obtained from recycling is equal in quality and purity to lead obtained from mining.
Key Minerals in Lead Production
Primary production of lead involves extracting the metal from ores found deep in underground mines.
More than 60 minerals contain lead, but only three contain enough to be considered commercially viable:
What Is Galena?
This mineral is the most common one extracted for lead production. In its purest form, it contains only lead and sulfur.
However, most galena contains other trace metals including:
What Is Anglesite?
This is a crystalline mineral that occurs when galena oxidizes
As a result, lead production usually occurs as a byproduct of silver or zinc mining.
Cerussite is the third most significant mineral known to produce lead, also known as white lead.
Top Lead Producing Countries and Reserves
|Rank||Flag||Region||World Mine Production (Thousand Metric Tons)|
Biggest Lead Reserves by Country
These are the reserves of each country as reported by the United States Geological Survey (USGS):
|Rank||Flag||Country||Thousands of Metric Tons|
Lead is ductile, dense, and has a low melting point. It also corrosion-resistant and can absorb radiation well. As a result, many industries rely on lead for their products.
What Drives Lead Prices?
The price of lead is driven mostly by these five factors:
- Chinese Demand
- Global Stocks
- Demand Outlook
- Competing Technologies
- Health Concerns
Chinese Demand for Lead
China uses over 40% of the annual global supply of lead and, therefore, is the biggest driver of its price.
Strong growth in Chinese GDP over the past two decades had pushed many industrial commodity prices higher.
However, Chinese GDP has slowed down in recent years, creating doubts about future demand for all industrial metals including lead.
Ultimately, lead prices depend specifically on Chinese demand for batteries and power storage devices.
As industrialization and urbanization expand in China, the demand for power sources will grow, and this should boost lead prices.
Traders should pay close attention to Chinese power consumption data for clues about lead prices.
Global Stocks Influenced by Lead
The London Metals Exchange (LME) keeps track of global lead stock levels, and traders follow these statistics closely.
Movement in these stocks numbers could be a harbinger of supply shortages or gluts.
Drops in global stocks often accompany price increases, while increases in stocks often signal an oversupply and lower prices.
Future Outlook on Lead Demand
An analysis of the lead market must focus on the battery industry, which accounts for about 85% of lead demand.
Government data from both emerging and developed economies suggests that energy demand is expected to double in the next decade.
To meet this demand, China and India have started trading in smart grid technology. These traders have led to the expanded use of lead-acid batteries in electric and hybrid vehicles.
Environmental concerns curtailed the production of lead-acid batteries in 2011, but now production is on the upswing. New applications such as grid storage for renewable energy generation could fuel demand for lead-acid batteries.
If the demand for these technologies continues to grow, the price of lead could move higher.
Competing Technologies in Need of Lead
Lithium-ion batteries compete with lead-acid batteries as a power storage source, and many industry experts believe lithium-ion batteries could ultimately replace lead batteries in many automotive applications.
However, there are limitations to lithium-ion battery adoption. Lead-acid batteries work better in high power vehicles. Also, lithium-ion batteries have historically been more expensive.
Traders should monitor this and other competitive threats to lead-acid batteries.
If rapid improvements in lithium-ion batteries continue, then lead prices could suffer.
Health Concerns Over Lead Use
Numerous health studies have indicated that chronic lead exposure is toxic to humans.
If more information becomes available about the health effects of lead exposure, consumers may switch to alternatives.
Expert Opinions on Lead
Experts are generally bullish about lead prices. Increased crackdowns on smog in China are leading authorities to scrutinize the lead industry.
These actions have the potential to curtail supply in the world’s largest lead producing country:
“We’re hearing that there are a lot more inspections, monitoring, and maybe some temporary shutdowns, generally constraints on lead producers.”Robin Bhar, Head of Metals Research at Societe Generale
Bhar also notes that a combination of low inventories and growing demand could also help lift prices:
“We have a chunky deficit, a winter demand uptick, we’ve had a fairly cold snap in Europe that’s boosting demand, and inventories are low within the whole lead supply chain.”Robin Bhar, Head of Metals Research at Societe Generale
Where Can I Trade Lead?
You can start your research with reviews of these regulated brokers available in .
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. <b>Between 53.00%-83.00% of retail investor accounts lose money when trading CFDs.</b> You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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