LEAD

The Multi Commodity Exchange of India Limited (MCX) is a India-based state-of-the-art electronic
commodity futures exchange that facilitates online trading, and clearing and settlement of commodity
futures transactions, providing a platform for risk management. MCX offers trading in more than 40
commodity futures contracts across segments including bullion, ferrous and non-ferrous metals, energy,
and agricultural and agri-based commodities.
INTRODUCTION
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Lead (chemical symbol - Pb) is very corrosion-resistant, ductile, and malleable blue-grey metal that has
been in use for at least 5,000 years.

It is usually found in association with zinc, silver, as well as copper ores.

It is one of the most sustainable and recyclable commodities. It can be recycled indefinitely, without loss
of its physical or chemical properties. Recycled lead accounts for more than 60% of the total lead
production.

The lead production process consumes less energy as compared to the production of any other metal.

APPLICATIONS

MCX is a
leading
commodity
exchange in
India, with a
market share of
87%*

Lead is principally used for manufacturing batteries, especially the ones used in automobiles, motorcycles,
electric cars and bicycles. Its incredible density provides unrivalled protection from radiation and is used in
hospitals, dental surgeries, laboratories and nuclear installations. Lead acid batteries are vital as a back-up
emergency power supply in case of power failure in computer installations, banks, telephone exchanges and
aircraft control towers amongst others. In the ongoing quest for clean energy, people have been turning to
alternative sources such as wind power and solar cells, whose storage and distribution systems rely on leadacid batteries. In earthquake prone regions such as Japan and California, the buildings are mounted on lead
shock absorbers that help minimise damage during tremors or earthquakes.
3%

Lead-usage

5%

Batteries
6%

Rolled and extruded products

Pigments and other compounds
Shot ammunition
Miscellaneous
Alloys
Cable sheathing

80%

(Q3 FY 2012-13)

Source: ILZSG

*In terms of the value of commodity

futures contracts traded
(Source: Data maintained by FMC)

1%
3% 2%

DEMAND & SUPPLY

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In 2012, the global lead mine production increased by 11.5%, over that of 2011.
Global refined lead production increased by 0.22% from 10.594 million metric tonnes (MMT) in 2011 to
10.617 MMT in 2012 .
The worlds refined lead consumption rose to 10.553 MMT in 2012, up from 10.418 MMT in 2011.
India and the Republic of Korea saw an increase in production of 8.9% and 8.2%, respectively, while India
and Japan saw an increase in consumption of 15.6% and 12.2%, respectively.
World Refined Lead Production

World Refined Lead Consumption

(in thousand MT)

(in thousand MT)

12000

Others

(in thousand tons)

For private circulation only

12000

Australia

10000

Rep. Korea
8000

Japan
India

6000

China

Others

10000

Rep. Korea

8000

Japan

6000

India

4000

United States 4000

China

2000

Mexico

United States

0
2008
Source: ILZSG

2000

Europe

Canada
2009

2010

2011

2012

Europe

0
2008

2009

2010

2011

2012

INDIAN SCENARIO
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In 2012, refined lead production was around 169,301 MT.

The main producers of lead are Hindustan Zinc Limited (HZL) and Indian Lead Limited (ILL).

GLOBAL SCENARIO
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In 2012, the global lead mine production was higher in a number of countries including Mexico, Peru, the
Russian Federation and Turkey, however, the increase was principally due to a reported 20.4% rise in
China.

Increased output of refined lead metal in India, the Republic of Korea, the United Kingdom and the United
States were largely balanced by reductions in Australia, Kazakhstan, Morocco, New Zealand and Spain.

In 2012, despite a further decline in Europes demand for refined lead metal by 2.4%, the global usage
increased by 1.3%, over the previous year. This was primarily a consequence of higher demand in India,
Japan, Mexico and the United States. Apparent demand in China was unchanged from 2011.

Chinas import lead concentrates rose by 26.3% in 2012 over the previous year, to reach a record of just
over 1 MMT.

In 2011, the leading refined lead exporting countries were Australia, Canada and Germany, whereas the
leading refined lead importing countries were USA, UK and India.
Leading Refined Lead Exporters - 2011
13.4%
30.2%
10.2%

Globally, MCX is
No.1 in gold
and silver,
No.2 in
natural gas,
and No.3 in
crude oil*

2.2%
2.6%
2.6%
3.0%
4.4%

9.2%
6.4%
4.5% 5.2%

6.1%

Leading Refined Lead Importers - 2011

Australia
Canada
Germany
UK
Rep. Korea
Kazakhstan
Mexico
Belgium
Russian Federation
India
Bulgaria
China
Other Countries

10.2%
8.6%
41.5%
6.5%
6.3%
5.8%
4.9%
3.8%
3.9% 4.1% 4.4%

USA
UK
India
Rep. Korea
Germany
Viet Nam
Spain
Italy
Malaysia
Other Asia, nes
Other Countries

Source: UN Comtrade - Year book 2012

IMPORTANT GLOBAL EXCHANGES

*In terms of the commodity futures

contracts traded during CY 2011
(Source: Websites of exchanges
and FIA data)

Exchange

Product

LME

Lead
Lead Mini

Lot Size
25 MT
5 MT

6:30 to 00:30 *
17:10 to 22:40 **

IST

Shanghai Futures
Exchange (SHFE)

Lead

25 MT

6.30 to 9.00
11:30 to 13:30

MCX

Lead
Lead Mini

5 MT
1 MT

10:00 to 23:30#(Monday-Friday)
10:00 to 14:00 (Saturday)

* LME select ** LME Ring timing (Start time:- Ring session, End time - Kerb Trading) #: Day light timing 10:00 to 23:55 (Winter)

FACTORS INFLUENCING THE MARKET

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www.mcxindia.com

Lead prices in India are fixed on the basis of the rates in the international spot market, and Indian Rupee
and US Dollar exchange rates.
Economic events such as national industrial growth, global financial crisis, recession, and inflation affect
the metal prices.
Commodity-specific events such as the construction of new production facilities or processes, new uses or
the discontinuance of historical uses, unexpected mine or plant closures (natural disaster, supply
disruption, accident, strike, and so forth), or industry restructuring, all affect metal prices.
Trade policies set by the Government (implementation or suspension of taxes, penalties, and quotas)
affect supply as they regulate (restricting or encouraging) material flow.
Geopolitical events involving governments or economic paradigms and armed conflict can cause major
changes.
As societies develop, their demand for metal increases based on their current economic position, which
could also be referred as National Economic Growth Factor.

LME

Jan-13

Jul-12

Oct-12

Jan-12

Apr-12

Jul-11

Oct-11

Jan-11

Apr-11

Jul-10

Oct-10

Jan-10

Apr-10

Jul-09

Oct-09

Jan-09

Apr-09

Jul-08

Oct-08

Jan-08

Apr-08

Jul-07

Oct-07

Jan-07

170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
Apr-07

$ / MT

4250
4000
3750
3500
3250
3000
2750
2500
2250
2000
1750
1500
1250
1000
750
500
250
0

` / kg

MCX Lead Near Month vs LME Cash Correlation - 99.61%

MCX

Source: Bloomberg

320000

120

270000

100

220000

80

170000

60

120000

40

70000

20

20000

Volume

Open Interest

Feb-13

Oct-12

Dec-12

Jun-12

Aug-12

Apr-12

Feb-12

Oct-11

Dec-11

Jun-11

Aug-11

Feb-11

Apr-11

Oct-10

Dec-10

Jun-10

Aug-10

Apr-10

Feb-10

Dec-09

Oct-09

Aug-09

Jun-09

Apr-09

Feb-09

Dec-08

Oct-08

Aug-08

Jun-08

-30000

Price

Source: MCX R&D

LME Lead 3 MTs Prices Vs LME Stocks

(including CTCL)
(as of Q3 FY 2012-13)

450,000

4000

400,000

3500

350,000

3000

300,000

2000
200,000
1500
150,000
1000

100,000

500

50,000
0
Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13

www.mcxindia.com

Source: Bloomberg

LME Stock

LME Price

Price in $ / MT

Stocks In MT

2500
250,000

OI & Vol in MT

140

Apr-08

MCX reaches
out to over
1,770 cities and
towns in India
through
3,46,000+
trading
terminals

Price in ` / kg

MCX Lead Volume & Open Interest

IMPORTANT WEB SITES

www.ilzsg.org | www.ilzro.org | www.metalbulletin.com | www.basemetals.com | www.futuresource.com |
www.gfms-metalsconsulting.com | www.world-bureau.com | http://minerals.usgs.gov | www.brookhunt.com |
www.metalsmarket.net | http://metalsplace.com | http://metalprices.com

CONTRACT SPECIFICATIONS LEAD & LEADMINI

MCX is the first

commodity
exchange in
India to launch
mini futures
contracts in
various
commodities

SYMBOL

LEAD

LEADMINI

Description

LEADMMMYY

LEADMINIMMMYY

Trading period

Monday through Saturday

Trading session

Monday to Friday: 10:00 am to 11:30 pm#

Saturday:

10:00 am to 2:00 pm

Contract month

Monthly contracts

Expiry date

Last day of the contract

Trading unit

5 MT

Quotation/base value

` / kg

Tick size

5 paise / kg

Maximum order size

100 MT

Daily price limit

4%

1 MT

Initial margin

Minimum 5% or based on SPAN, whichever is higher

Special margin

In case of additional volatility, an additional margin (on both buy & sell
side) and/ or special margin (on either buy or sell side) at such percentage,
as deemed fit; will be imposed in respect of all outstanding positions.

Maximum allowable
open position

For Individual clients: 1,800 MT

For a member: 9,000 MT or not more than 15% of the market-wide open
position, whichever is higher.

Delivery logic

Both options

Delivery unit

10 MT with tolerance limit of +/ 1% (100 kg)

Delivery center(s)

Within 20 kilometers outside Mumbai octroi limit

Due date rate (DDR)

calculation

Due date rate is calculated on the last day of the contract expiry, by taking
international spot price of Lead and it would be multiplied by Rupee-US$
rate as notified by the Reserve Bank of India.

#: Day light timing 10:00 am to 11:55 pm (Winter)

Note: Please refer to the exchange circulars for the latest contract specifications and delivery and settlement
procedures.

www.mcxindia.com

090413

Customer Support: +91-22-6649 4040 | To get the latest futures prices on mobile: visit http://m.mcxindia.com or sms MCX <Commodity name> to 58888

Multi Commodity Exchange of India Limited

Exchange Square, Suren Road, Chakala, Andheri (East), Mumbai 400 093 | Tel. no.: +91-22-6731 8888 | Email: info@mcxindia.com | Website: www.mcxindia.com