Economical Aspects

The Macroeconomical Reference Framework

The lead market has recently undergone significant structural changes, which are summarised as follows.

• The environmental issue has impacted the production system, accelerated the obsolescence of old technology of primary lead production from its ores and triggered the research of new products with lower lead content or absolutely lead-free.Therefore, pigments, paints and anti-detonating compounds are now lead-free, while the lead content of hunting ammunition has been significantly reduced.

• The production of lead accumulators absorbs 70% of the lead metal produced in the world.

• A small number of international corporations control 80% of the production of lead accumulators.

• The volume of lead produced from secondary materials, mainly batteries, has grown remarkably in the developed countries.

• Traditional lead-bearing ore deposits (galena) are almost exhausted, so that polymetallic complex ores must be mined. This makes lead dependent on the economics and market of other metals.

The volume of accumulators produced annually determines in turn the volume of spent batteries to be treated by the smelters; so the battery producers fix annually the quantity of secondary lead they can receive back.

World production of secondary lead (50-60% of the total) plays a significant role in controlling the official lead price. While battery collectors and smelters can benefit from rising prices, battery producers cannot. This situation could induce the producers to collect the spent batteries through their own distribution network, thus reducing the cost of recycling. Furthermore, the producers might even run smelting plants of their own to further limit the final cost of secondary lead.

Some battery producers already collect spent batteries and sell them to smelters saving on the recycling costs; others collect and recycle in their own metallurgical plants. In the medium/long run, this action of the battery producers may result in their independence from the lead producers. Obviously, there is no general solution for each case, since countries differ in terms of macroeconomy, nature and dimensions of the territory, environmental strategies.

The Market and its Evolution

The world lead production at the beginning of the year 2000 amounted to 6 million tons/year, with 60% of it coming from secondary lead, especially from spent accumulators. The production of secondary lead started a few decades ago, affecting the traditional lead market based on metal extracted from ore. Such dramatic change can be explained as follows.

• Fast development of people and goods mobility, mainly thanks to the improved surface infrastructures.

• The replacement of lead in several applications, once its harm had been ascertained.

• Short life of car accumulators, involving their replacement and recycling of scrap-lead as a raw material. In this way developed countries are considering the scrap-lead source as "lead mine", cheap to exploit and almost inexhaustible.

• Producing lead through recycling is a process economically more appealing than doing the same from ores. This change in philosophy took some time to be assimilated - until the new process became economical and safe both for the workers and the environment. To this end, the regulations imposed by public administrations have proved critical to help change the former approach.

In the medium/long run, the lead market is expected to grow thanks to an increased demand for cars (i.e. of the accumulators equipping them) especially in Asia and Eastern Europe. The demand for industrial accumulators will also be continuing steady especially for telecommunication systems.

Every year, about 3,900,000 tons of lead are used to produce accumulators. Taking into account that 65% of the accumulators weight is lead, some 6,000,000 tons of accumulators are thus produced every year. If the conservative estimates of an annual growth of 3-4% are confirmed for the automotive sector, this will result in 10,000 tons/year of accumulators within a few decades and the same quantity should theoretically be available for recycling. :

Qualitative Market Evolution

The well known harmful nature of lead has determined over the last decades a dramatic disappearance from the market of those products and chemicals containing this metals. The present use of lead according to the sector is given in Table 1. Lead accumulators (for stationary use, traction or starting) largely prevail.

Table 1

Application

%

Batteries

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