Trading at $3,205 per tonne as at 13:30 pm London time on Monday June 11, zinc’s three-month price is recording a steady upward trend after breaking past its nearest resistance level on June 8. 

That said, zinc prices have edged away from first-quarter highs that exceeded $3,500 per tonne in February and fell to a 2018-low of $2,970 per tonne on May 4. 

Following a similar trajectory, lead’s three-month price is trading close to the $2,500 per tonne level after spending much of May trading around $2,300-$2,400 per tonne.

Similarly, positive trading in February saw lead’s three-month price trade upwards of $2,600 per tonne.    

Metal Bulletin Research forecasts lead prices to trade in a range of $2,300-$2,550 per tonne throughout the second quarter, already exceeding its base level forecast of $2,450 per tonne.

Zinc is expected to trade at $2,900-$3,350 per tonne for the same period, according to MBR, with a base level of $3,100 per tonne.    

The International Lead and Zinc Study Group (ILZSG) forecasts the usage and supply of both lead and zinc to increase in 2018, with refined lead metal set to rise by 2.7% against refined zinc’s 2% increase. 

“Lead and zinc are often found together, but the story is tighter for lead in this case. You may see that gap narrow as lead comes back towards zinc. I do not believe that price action in zinc will be as active as in lead,” Geordie Wilkes, head of research at Sucden Financial, told Metal Bulletin. 

Currently at $722 per tonne, the price difference between the two metals reached $544 per tonne on May 24, its lowest gap of the year. 

On February 26, the gap reached its widest point in ten years at $960.50 per tonne. 

“That said, there are a couple of interesting resistance levels in zinc’s fight. If broken through, we could see further short-covering and a move towards $3,400 per tonne. Inventories for zinc have increased, we’re now at 250,000 tonnes, which is quite interesting. If that continues, it could weigh on prices,” Wilkes added. 

Sucden Financial’s quarterly metals report specifies that lead prices fell 4.1% in the first quarter, while falling global supply and poor quality material could be set to support rising prices in 2018, forecasting a range of $2,200-$2,600 per tonne. 

The broker’s outlook for zinc also takes into consideration favorable demand spikes at a $3,000-$3,500 per tonne forecasted range, while the drop in treatment charges (TCs) to a low of $147 per tonne has given greater scope for smelters to offset falling TCs through rising utilization rates.

Despite the lowering of annual TCs, mined production for both lead and zinc is set to increase by 4.2% and 5.1% respectively, according to ILZSG. 

Wood Mackenzie forecasts the rate of mined production in the zinc market to offset the ability of global smelters to absorb surplus concentrate, resulting in an eventual levelling out of TCs. 

That said, the energy research consultancy sees a favorable upward spike in zinc prices for the latter half of 2018, with its three-month price expected to drift beyond $4,125 per tonne in 2019.

Foreseeing the lead market taking an alternate path, one that could see prices tick downwards from this year’s prospected $2,460 per tonne figure, Wood Mackenzie maintains a positive view on lead prices remaining supported above $2,250 per tonne in the long term.