2025 Lead Market: Price Surge Ahead as Supply Tightens and Production Costs Climb

Lead prices ended 2024 on shaky ground, but the volatility masking a deeper story—one that investors need to understand heading into 2025. Despite wild swings throughout the year, prices closed down just 2.41 percent since January, yet the trajectory beneath the surface reveals critical shifts in global supply chains and production economics.

The Rollercoaster Year: What Happened to Lead in 2024

The year started strong with prices hovering above US$2,025 per metric ton. In the first month alone, lead surged nearly 8 percent as primary and secondary supplies tightened unexpectedly. This rally didn’t hold—by late March, prices retreated to US$1,963, only to stage a comeback that peaked at US$2,343 on May 28. This was the highest point of the entire year.

China proved to be the pivotal force. New emission standards for battery manufacturers, introduced in April 2024, severely constrained domestic lead supply. For the first time in years, China flipped from net exporter to net importer of refined lead. According to the International Lead and Zinc Study Group (ILZSG), China’s lead concentrate imports climbed 7.5 percent in the first 10 months compared to the same period in 2023. This shift alone pushed prices higher, reflecting the cost of lead adjustments across global supply chains.

But August brought reality crashing down. On August 5, lead prices plummeted more than 17 percent to US$1,930, marking the year’s low point. The rest of 2024 saw prices bounce between US$1,950 and US$2,150—exhausting territory for traders and analysts alike. By year-end, after Donald Trump’s reelection and subsequent U.S. dollar strength, downward pressure returned.

Supply and Demand Imbalance: The Real Story

Here’s where the cost of lead economics gets interesting. Global lead mine production rose only 1.5 percent in 2024’s first 10 months, constrained by elevated energy prices and automobile industry supply chain disruptions. Meanwhile, refined lead metal production actually declined 1.7 percent, with China and Canada bearing the brunt. Teck Resources’ Trail operations in Canada, for instance, faced scheduled maintenance that crimped second-quarter output.

On the demand side, consumption fell 1.6 percent. Yet supply still outpaced demand—by 21,000 metric tons in the first 10 months of 2024, down significantly from the 41,000-ton surplus the prior year. This narrowing gap signals tightening fundamentals heading forward.

The reason? Beyond battery demand from electric vehicles powering electrical systems (lights, windows, navigation, air-conditioning, airbag sensors), traditional lead-acid batteries remain essential. Lead is also mined as a by-product of zinc, silver, and copper—meaning disruptions in those markets ripple directly into lead markets.

What’s Expected in 2025: Supply Growth and Price Pressure

The ILZSG forecasts a notably different landscape for 2025. Global lead mine supply is projected to rise 2.1 percent to 4.64 million metric tons, compared to just 1.7 percent growth in 2024. Output increases are anticipated from the “big three” producers: China, Australia, and Mexico. This acceleration matters because more mine supply typically pressures prices.

Refined lead supply is also expected to climb 2.4 percent to 13.51 million metric tons in 2025. Here’s the concerning part: the ILZSG anticipates a supply surplus of 121,000 tonnes in 2025, nearly double the 63,000-ton excess forecast for 2024. Such oversupply could keep the cost of lead elevated or force prices lower—depending on demand trajectories.

Demand growth, however, remains sluggish. China’s refined lead demand is projected to grow just 0.5 percent in 2025, down from 0.9 percent in 2024. Globally, refined lead demand is forecast to increase 1.9 percent to 13.39 million tonnes. Recovery is expected in Europe and Mexico, while India and Vietnam should see continued growth. But these increases won’t fully absorb the coming supply surge.

The X-Factors: China’s Economy and Trade Policy

Two macro forces will make or break the 2025 lead outlook. First is China’s economic health. As the world’s largest lead consumer, any slowdown in Chinese industrial activity dampens demand materially. The World Bank forecasts 4.3 percent annual growth for China in 2025, down from 4.8 percent in 2024. Particularly concerning is China’s residential property sector weakness, since lead has significant applications in housing and infrastructure outside batteries.

Second is geopolitical uncertainty. Trade tensions between the U.S. and China could disrupt supply chains and dampen investment in capital-intensive industries that use lead. These headwinds may offset some of the upside from rising EV battery demand.

The Analyst Consensus: Modest Price Increases Likely

StoneX Group’s senior metals analyst Natalie Scott Gray offered a contrasting view during LME Week discussions. She expects lead demand to increase 2.2 percent in 2025 as falling interest rates improve battery demand—a sharper uptick than ILZSG’s forecast. Her reasoning: as copper, zinc, and silver mining activity increases, so does lead output as a by-product. Improved financing conditions should unlock battery-driven demand.

Scott Gray’s analysis suggests a modest price appreciation for lead in 2025, though the degree depends heavily on whether demand surprise to the upside or supply disappointments materialize.

Bottom Line for Investors

Lead enters 2025 at an inflection point. Price trajectory will hinge on how aggressively Chinese stimulus materializes, whether trade tensions escalate, and if EV battery demand proves resilient. While supply is expected to expand meaningfully, demand growth remains tepid. The cost of lead will likely stay range-bound unless one of these macro catalysts dramatically shifts the equation. Monitor China’s industrial data and monetary policy closely—they’ll be the true price drivers in 2025.