Going long on lead and also brief on copper continues to be a strong investment strategy in 2014, especially as lead tilts towards a supply deficit and copper toward excess, financial investment bank BNP Paribas stated Thursday.

In spite of lead's underperformance in recent weeks, "We remain to believe that lead's prospects are stronger than a lot of, including, in the meantime a minimum of, those of zinc," Paribas analyst Stephen Briggs said Thursday in a record labelled "Better Lead than Red." "In addition, since copper has actually recuperated toward $7,000/ mt, we are much more positive than in March that it still has drawback potential over the next three-four quarters."

With international lead need likely to expand 4-5% both this year and following, he stated, it will be hard for recycled-lead producers to maintain, yet on the mining side, "lead is typically just a by-product and also one that many firms are keen to prevent on ecological premises."

And although lead outcome will not be struck as hard as zinc by pending large mine closures, he included, "Lead scarcely features amongst brand-new mines. We believe the international lead market is getting in a prolonged period of supply deficit ... and also from a position where inventories are already fairly low." COPPER'S SUPPLY/DEMAND IN SYNC

In contrast, Briggs said, the copper market is tipping into supply surplus in 2014 and 2015. Although the red metal is additionally anticipated to see healthy and balanced need growth at 5% each year because time, unlike lead, the supply side is anticipated to keep up.

" boiler water treatment chemicals manufacturing development will pick up wisely as mine result remains to increase strongly (albeit not at the pace of 2013) and also smelters attract down the concentrate stocks that accumulated in 2015," Briggs stated, as well as inventories in China are high.

" Although Chinese task may continue to mask the underlying market equilibrium, we expect visible supplies to trend back up in [the second half of] 2014 and also 2015," he claimed.

Nonetheless, despite copper's less remarkable fundamentals, Briggs stated he did not anticipate the red metal's price to drop listed below $6,000/ mt this year, but said rallies above $7,000/ mt would likely be brief.

On the other hand, lead may strike $2,500/ mt by mid-2015.

" So we keep our short copper versus long lead suggestion," Briggs stated. "Persistence may be called for. And also the profession is less eye-catching the better out it is started ... as a result of the very different form of both forward contours (backwardation for copper and contango for lead).".

He forecast the copper/lead cost proportion would certainly sink to 2.5:1 by mid-2015.