Lead-acid batteries are commonly used in vehicles with internal combustion engines and are gradually giving way to lithium-ion batteries, preferred in the fast-growing electric vehicle (EV) sector.
"The price of lead has largely stabilized in the second half of this year, but the price of lithium has risen very quickly," Antaike analyst Zhang Zhiwei said at the China Lead and Zinc Conference.
Lithium carbonate battery prices in China have more than quadrupled this year to a record $ 36,514 /t due to resurgent demand for electric vehicles.
Meanwhile, lead on the Shanghai Futures Exchange has risen in price by only 5%, making it the cheapest base metal on the exchange.
"EVs are very sensitive to the price of lithium batteries ... I believe there should be some return (for lead) in 2022 due to price differentials," Zhang said.
However, according to Antaike, the global refined lead market is expected to have a surplus of 95,000 tonnes in 2022, up from 19,000 tonnes this year due to a significant increase in secondary lead production.
The lead concentrate market is also expected to have a larger surplus of 57,000 tonnes next year, up from 40,000 tonnes in 2021, the research center said.
On the related zinc metal, supplies of Chinese concentrate could drop to 43,000 tonnes next year from an expected departure of 57,000 tonnes in 2021, with mining projects starting later than planned. But projects outside of China will make up for the decline and create a global surplus of 251,000 tonnes in 2022, up from 140,000 tonnes this year.
A surplus of refined zinc could rise to 100,000 tonnes in China next year from 89,000 tonnes in 2021 due to a 16% drop in demand, while the global market could face a shortage of 5,000 tonnes next year, which will decrease due to a deficit of 54,000 tons in 2021, as shown by Antaike data.