Thursday July 31, 2014 11:35 AM

BNP Paribas sees further gains into next year for lead, which it says “burst into life” in late July and outpaced other base metals. In a report titled “lead fires a warning shot,” the bank says it expects demand growth of 4% to 4.5% this year and next. Meanwhile, supply constraints have begun to shift the lead market toward a prolonged period of sizeable deficits, BNP Paribas says. The bank sees limits on how much recycling can grow, putting the onus to meet demand on the primary mining sector. However, lead “is usually only a by-product and one that most firms seek to avoid on environmental grounds,” BNP Paribas says. The bank sees global mining production increasing by just 3% to 4% between 2013 and 2015, although with risks tilted to the upside. Lead may need a period of price consolidation after its recent spike. But nevertheless, BNP Paribas says it still looks for lead to hit $2,500 per metric ton by early 2015 and $3,000 by late next year. As of 11:08 a.m. EDT, three-month lead on the London Metal Exchange was at $2,220 a metric ton. It peaked at $2,307 earlier this week, its strongest level since February 2013.

By Allen Sykora of Kitco News; asykora@kitco.com