Hi Deidre and All.Some better news on lead even though zinc is...

Hi Deidre and All.

Some better news on lead even though zinc is still not in the pink.


Lead Advances in London Trading on Sign Stockpiles Will Shrink

Aug. 6 (Bloomberg) -- Lead rose in London after the amount of stockpiled metal earmarked to leave warehouses jumped to a 22-month high, indicating a possible supply shortfall.

So-called canceled lead warrants gained 2.7 percent to 10,525 metric tons at warehouses registered with the London Metal Exchange, the highest since Sept. 28, 2006. The market is shifting from a surplus into a deficit of 67,000 tons this quarter, according to Barclays Capital. That's equal to about 72 percent of existing LME-tracked stockpiles.

``A big jump in canceled warrants suggested we're going to see stockpiles declining,'' Gayle Berry, an analyst at Barclays Capital in London, said today by phone. Lower-than-expected output in China, the world's largest producer of the metal, will curb supply of the metal, she said.

Lead for delivery in three months added as much as $85, or 4.2 percent, to $2,100 a ton, the biggest intraday gain since July 28, and traded at $2,060 a ton as of 4:26 p.m. in London. The contract rose 1 percent yesterday, while the LME index tracking all industrial metals gained less than 0.1 percent.

Lead has declined 19 percent this year, the second-worst loser on the LME after nickel. Chinese prices are about $600 to $700 a ton more expensive than international prices, an incentive for increased imports of the metal into the world's largest consumers of the commodity, Berry said.

Supply Disruptions

Open interest, or outstanding contracts, in lead futures has jumped 29 percent since the end of June, to 95,683 contracts, the highest since records began in 2005. Expanding open interest as prices gain suggests investors and traders are taking a net long position, or a bet prices will rise further.

Only time will tell if the recovery will last but an increase is an increase.

Cheers.