Heavy Metal

Back in The Day, I remember that my shotshell lead was $25 for four bags. I’m sure that some may recall even lower prices. Yesterday at the local mega sports-mart, I saw shot at $53/bag. Snoopy, can you say “Aaarrrggghhh”?

Everything has gone up due to inflation, but lead has been particularly volatile. Lead is a commonly traded world commodity. There are lead mines all over the place, but about three-quarters of the world’s lead comes from only six countries: China, Australia, Peru, Canada, Mexico and the US.

The trouble is that there are cars all over the place too. About 80 percent of all lead used goes into lead-acid vehicle batteries. China consumes 30 percent of the world’s lead, because it makes the most batteries. That’s the bad news. The good news is that a very high percentage of that lead gets recycled. Not just here at your local Sears, but worldwide too.

All of the lead used for military and civilian ammunition accounts for less than 2 percent of the world’s output. If you think of shotshell lead only, there are a bunch of zeros after the period before you get a percentage number. We shotgunners are just a straw in the storm and have no influence at all on the world price.

Like any world commodity, lead prices fluctuate. Reasons for fluctuation obviously have to do with supply and demand, but recently lead, like other commodities, has also been the subject of speculation as a currency hedge. You can thank the plummeting dollar for some of that.

The recent history of world lead prices and lead supply is readily available at www.kitcometals.com/charts/lead_historical.html.

Five years ago the world price for a pound of lead was about 25¢, and shot was about $12 per bag. Raw lead gradually doubled to 50¢, and then, about two years ago, it started to skyrocket. In March 2007 I paid $30 per bag as the price started to soar. By the end of ’07 it had reached an all-time high of $1.80 per pound, and shortly after that bagged lead shot was in the high $40s.

As I write this, on July 3, raw lead has dropped back to 69¢ per pound, back to about where it was two years ago. So what’s with the $53 per bag price?

With stores, it’s just inventory timing. Some stores won’t lower their lead prices until they sell the expensive lead they have in inventory. More-sophisticated venders will abandon LIFO and FIFO and combine new and old stock prices to come up with something in the middle. Most of us reloaders simply will wait as long as possible before buying shot in the hopes of avoiding the spiked price. As always, prices that go up quickly seem to come down slowly. Right now we are starting to see lead at $33/bag at some shoots, but the price is much higher in the stores due to slower inventory turnover.

Factory loads are different. Shellmakers gradually raised prices as they worked through their older lead inventories, but now they are dealing with high-cost-inventory lead and the new lower-cost lead hasn’t factored in yet. Unfortunately, I cannot remember the price of a premium American factory load ever coming down once it has gone up. Perhaps you have a better memory than I do. We’ll see what happens this time. If there is going to be a price break down the road, I’d look to foreign shells to show it first.

So where is lead going and how will it affect our shell prices? I don’t have a clue what will go on in the back rooms of the London Metals Exchange. Right now lead is back down to what it was before the big speculative spike, but it is still three times what it was five years ago. My guess is that I wouldn’t look for the major ammo companies to lower their prices on factory shells until lack of demand forces them to, but lead for reloading is coming down. You can come out of the storm cellar now.

Keep an eye on Kitco.com. It’s no crystal ball, but it is informative. What do you see for the future? How are you handling the cost of lead and ammo?

That’s it for now. Boots off. Beer open.