Production, mined lead trends

The use of lead, however, has increased dramatically since the early days of the industrial revolution (Fig. 1.1). The trend over the last decade, nevertheless, runs counter to the previous exponential rate of growth, with mined lead production stabilizing at just over 2.5 million tonnes per annum (Fig 1.2). Future trends must remain somewhat uncertain, although a decline in production and consumption is unlikely. 

US coal prices have increased somewhat due to rising transportation costs (Figure 2.6). However, the overall trend in coal prices as measured at the mine (mine mouth) is downward as coal producers continue to find ways to increase the productivity of the average mine. The average delivered price for utilities increased just 5.7% during 2004 (EIA 2004), but 13.2% for industrial users. The widespread use of futures contracts in the coal industry has helped to keep prices stable. The overall stability of coal prices likely also will lead to a renewed interest in coal by utility officials and others, who until recently, believed natural gas was the fuel of the future. Anecdotal evidence purports an increase in coal use at the residential level. Homeowners with access to delivered coal found it is possible to heat less expensively with coal than natural gas or oil in the 2005-2006 heating season (Kamery 2006). 

A useful summary of levels and trends in mine and smelter production, and of developments in refined metal consumption is provided by the industry metal balance. The balance can be drawn up for particular areas or regional markets, but most commonly covers the Western World, see Table 2.2. It pulls together the various elements of Western World lead supply and demand (including, separately, net trade with the Eastern Bloc in concentrates and refined metal), and focuses attention on the overall balance between them, with metal surpluses or deficits expressed in terms of an apparent change in stocks over a given period (usually a quarter or a year). In this way, the prevailing market position can be (fairly) accurately assessed and compared with developments in price and other market indicators (like reported stocks, turnover, etc). The construction of a metal balance also often forms the basis of forecasts of future trends in supply, demand and price (see Chapter 16). 

Until the 1950s, the trend in world refined lead production was similar to that of mine output, as one might expect. After passing 1 million tons per annum in the early years of this century, refined lead production took almost another 50 years to exceed 2 million tons. However, between 1950 and 1970 refined production grew at an average annual rate of about 4 per cent, though rather erratically. By the end of this period refined output approached 4.7 million tons. 

After reaching a peak of almost 3.7 million tons in 1973, world lead mine output first stagnated and then began a slow decline, aithough with pronounced cyclical variations, see Fig. 8.1. The trend in Western World production alone over the last three decades has been similar, but with more marked short-term volatility. From about 2.65 million tons in 1973, mine output in the West has since fallen at an annual average rate of some 0.7 per cent, and is currently running at about 2.4 million tons per year. 

Secondly, and probably of more fundamental importance, is the multimetal nature of most mining operations that produce lead. As previously mentioned, lead is normally mined together with zinc, quite commonly also with silver and copper, and less frequently with gold and some minor metals. Although the relative value of each metal will vary between operations, this means, clearly, that decisions on new lead mine investment and output of lead concentrates will often be heavily influenced by price trends in co-product metal markets. 

In the longer run, prices are also related to trends in production costs (or the cost of supplying metal), as we have seen. It seems apparent that, in real terms, the cost of mining and extracting lead has fallen quite steeply over... 

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