Little known to many people, the lead that is used in car batteries is classified as part of the base metal family in the metal industry; And it is likely that Lead price will be the top investment in the metal family this year.
Lead is a metal that has one of the lowest inventory level among the base metal family, and that inventory is still falling; at the same time demand is still strong.
Lastest news about Lead is that China may slash export of Lead by more than half after the government imposed a tax on overseas sales, thereby worsen global shortage:
According to The International Lead and Zinc Study Group, this year's shortage of lead will be over 50,000 tons. Global demand will rise by 4.1% to 8.26 million tons, with China's usage increasing 12.4%, mainly because of the expanding car ownership.
China's economy has grown by an average of about 9.5% a year for the past decade, making vehicle ownership affordable for more people. The country's vehicle sales increased 25% last year to 7.22mil units, surpassing Japan as the world's second-largest auto market.
Lead is a poisonous substance, exploration of lead by miners is difficult and slow due to environmental issues. Reduced shipments from China, where demand for the metal is growing because of increased vehicle sales and production, may boost prices further. I do forsee that Lead price rising to $3000/mt in the future.
Lead futures is a leveraged product, about 13 times. So if Lead price really rises to $3000/mth as per my prediction, this is 12% upside; and due to 13 times leverage effect, the end result will be 12% x 13 = 156% return. Margin required for 1 lot of Lead futures is USD4,500.
For the Lead chart, look at: http://basemetal-trading.blogspot.co...-for-lead.html