29-12-2025

Introduction: Beyond the Sideways Cycle For much of the past year, the lead market was defined by range-bound stagnation and lack of investor interest but the sideways move is over. As of December 26, 2025, lead has entered a decisive positive breakout phase, fueled by an aggressive convergence of "New Economy" demand and "Old Economy" supply constraints. Lead is increasingly viewed as a critical transition metal due to its essential role in energy storage and its unmatched sustainability, with nearly 60–65% of global supply now originating from recycled sources. Despite a global surplus in refined lead in late 2025, the market is experiencing a Pricing Paradox scrap availability remains tight due to collection bottlenecks, keeping scrap premiums firm even as refined inventories rise. No longer just a legacy

component for cars, lead has emerged as a mission-critical infrastructure asset for telecom, renewable energy, and the rapidly expanding AI data center sector This report dissects the high-volume breakout above the ₹185.50 resistance and explains why the current momentum is backed by the most significant supply-demand mismatch in a decade.


Global Market Landscape: Hubs of Production & Consumption
The lead market is highly centralized, with a few key regions controlling both the primary ore supply and the secondary recycling loops. A. Major Producers: The Supply Powerhouses Global lead production is split between Primary Mining (newly extracted ore) and Secondary Smelting (recycled scrap). As of late 2025, secondary production accounts for over 60% of total output in regions like North America and Europe.  Top Mining Nations: o China: The undisputed leader, producing over 4.5 million tonnes of refined lead annually (~40-50% of global supply). o Australia: Home to the world`s largest lead reserves; a critical exporter of high-grade lead and zinc concentrates. o Peru & Mexico: Dominant primary producers in the Americas, feeding smelters across the globe.  Key Producing Companies: o Glencore (Global): The world’s largest lead producer, managing a massive integrated supply chain across Australia, Kazakhstan, and Europe. o Hindustan Zinc (India): A top-tier global player and India’s leading integrated producer. o Gravita India: A global leader in secondary lead, specializing in advanced battery recycling technology with operations across Asia and Africa. o Korea Zinc: A major refiner providing high-purity lead primarily for the Asian electronics and automotive sectors. B. Major Consumers: The Demand Engines Consumption is driven by two main forces: the Automotive Aftermarket and the Digital Infrastructure Boom.  Leading Consuming Nations: o China: Consumes over 50% of the world’s refined lead, fueled by its massive evehicle fleet and lead-acid batteries for telecom base stations. o USA: A high-volume consumer where demand is increasingly shifting toward AI data center backup power in major tech corridors. o India: A rapidly growing market driven by rural electrification, "Make in India" manufacturing, and the telecom sector. Fundamental Pillar : The "Scrap Gap" & Supply Fragility  Supply Dynamics The Scrap Gap Lead supply is heavily dependent on recycling, with over 65% sourced from secondary material, primarily spent lead-acid batteries. In late 2025, secondary smelters reported a 12% decline in scrap intake, driven by longer battery life cycles and slower vehicle replacement rates. This structural tightening is creating a “scrap gap,” which primary mine output cannot offset.

Global lead mine production rose marginally to 3.74 million tonnes (+0.1%) during Jan–Oct 2025. Regional production trends were mixed increases in China, India, Peru, and parts of Europe were largely offset by declines in Australia, Kazakhstan, and the United States. As a result, overall supply remains flat, increasing market sensitivity to scrap availability.

29-12-2025

Demand Dynamics The AI & Infrastructure Boom

1. AI Infrastructure: Lead demand is supported by structural factors rather than cyclical trends. Rapid expansion of AI data centers has increased requirements for VRLA lead-acid batteries in UPS systems. Despite the rise of lithium alternatives, lead-acid batteries remain preferred due to superior fire safety, reliability, and ~99% recyclability. 2. EV Auxiliary Load: The EV ecosystem further supports demand. Every electric vehicle still uses a 12V leadacid battery for critical safety and operational systems, including ABS, sensors, and electronic controls. Consequently, EV adoption maintains a stable baseline of lead demand. 3. Global Usage Growth: Reflecting these drivers, global refined lead demand reached 10.93 million tonnes (+1.5% YoY), with notable growth in Brazil, Taiwan, the United States, and Vietnam, confirming the durability of demand across multiple regions. Supply–Demand Balance – Market Analysis For 2025, the global lead market shows a structurally tight environment. Total supply, combining primary mine production and secondary recycled lead, is estimated at approximately 14.5 million tonnes, while total demand is projected at 10.93 million tonnes. On the surface, this suggests a nominal surplus however, the dynamics within the supply mix highlight emerging risks that could tighten the market further. A key concern is the “scrap gap” a decline in secondary supply driven by longer battery life cycles and slower vehicle replacement. Since over 65% of lead supply is sourced from recycled material, even a small disruption in scrap flows can significantly constrain effective supply. This makes the apparent surplus somewhat misleading, as the market’s flexibility is limited. Risk factors that could further stress the balance include: 1. Further slowdown in scrap flows: Any additional reduction in recycled battery availability could exacerbate supply tightness. 2. Macro shocks affecting industrial demand: Economic slowdowns, particularly in key consuming regions, could alter demand patterns and affect market stability. 3. Regulatory changes in recycling: Shifts in battery recycling policies or environmental regulations could restrict scrap availability, adding volatility to supply. Overall, while the market currently reflects a manageable deficit, the interplay of secondary supply limitations and demand growth implies that tightness is structural, and price sensitivity to supply disruptions is elevated. Investors and market participants should monitor scrap intake trends and regional supply developments closely, as these factors will largely dictate market balance and pricing over the medium term.

29-12-2025

The Geological Triple-Threat: Silver, Zinc, and Lead : In the mining industry, Lead is rarely found in isolation. It is almost always co-produced with Zinc and Silver from the same complex ore bodies, such as Galena and Sphalerite. As of late 2025, this inseparable connection has become the primary driver of the "Lead Paradox"— where price action is often dictated by its "sister" metals rather than its own fundamentals.  The Byproduct Bond: Approximately 70–75% of global silver is produced as a byproduct of lead and zinc mining. In December 2025, with silver hitting record highs near $65– $70/oz, mining companies are aggressively increasing output to capture these historic precious metal profits. This creates a "price-insensitive" supply of lead; miners will continue to produce lead even if its price is flat, simply to get to the high-value silver, potentially leading to an accidental "supply glut" of refined lead.  The Zinc Mirror: Lead and Zinc are often mined in a near 1:1 ratio. This creates a perfect synergy for modern infrastructure: while Zinc is used to galvanize the steel frames of AI data centers and solar racks to prevent rust, Lead provides the essential VRLA backup power for those same systems. When industrial demand for Zinc rises, the global supply of Lead automatically increases alongside it.  Smelter Economics & Profit Shifts: Smelters typically process lead-zinc concentrates together. In 2025, while global lead mine production grew by a modest 2.3%, silver`s massive 120%+ year-to-date gain has completely shifted mine profitability. For major producers like Hindustan Zinc, silver now contributes nearly 40% of total profits, making lead production decisions more sensitive to silver’s record-breaking "melt-up" than to lead’s own price signals on the LME or MCX.

29-12-2025

Institutional Positioning LME Open Interest (OI) and Volume Dynamics Total Market Open Interest (MOI) on the LME remains steady near 200,000 lots, indicating that institutional participants continue to hold positions rather than unwind exposure.This stable open interest provides a strong liquidity foundation for the market and suggests that price moves are being supported by committed capital.Forward-month positioning is particularly significant. The March 2026 contract carries the highest Exchange Open Interest (EOI) at 35,565 lots, indicating a medium-term bullish bias and confidence in price resilience into early 2026.Volume activity reinforces this interpretation. Daily trading volumes peaked near 145,000 lots in mid-December, yet open interest remained unchanged. This behavior is consistent with institutional accumulation or position rollovers, rather than exit-driven selling. CME Lead (LED) Contract Overview The CME Lead futures contract (LED) complements LME pricing and serves as a key benchmark for global price discovery and hedging. The contract is physically delivered, with a unit size of 25 metric tons and pricing in U.S. dollars per metric ton. Its Globex code is LED, and it is widely used by producers, consumers, and institutional participants to manage price risk efficiently. The coexistence of multiple liquid benchmarks (LME + CME) enhances market transparency and depth, enabling better hedging and risk allocation.

29-12-2025

The Silver-Lead Advantage: High Performance Without the Cost Pure silver offers superior conductivity, but strategic alloying makes more sense. Cost Efficiency: With silver near $70/oz this month, it’s nearly 80 times more expensive than lead. The Lead-Silver-Calcium Approach: Instead of using pure silver, batteries combine lead with a tiny amount of silver (less than 0.03%) and calcium. This small addition boosts battery life by 30–50% and prevents corrosion, even under high-heat conditions like AI data centers. Lead provides an affordable, recyclable base, while silver acts as a performance insurance, enabling reliable operation in modern technology systems. Technical Analysis Lead has been trading in a sideways range for the past 1.5 years, forming a solid consolidation base. This prolonged range reflects a period of accumulation, where price action has remained contained between key levels, building potential energy for a future directional move. The immediate resistance is at 185.50, while support lies between 180 and 173. A clear breakout above the resistance could trigger a strong upside rally toward 197, whereas failure to break this level may keep the price trading within the established support zone. Given the extended sideways movement, a confirmed breakout is likely to result in a significant and sustained upward trend, offering favorable momentum for bullish positions. Traders should watch for a decisive move above 185.50 as a potential signal for strong upside opportunity, with a stop-loss placed below 173 to manage downside risk.

29-12-2025