Lead-Acid Battery Companies Increase Production Cuts and Shutdowns: Current Status of Orders from Automakers, Replacement, and Export [SMM Survey]

According to the survey, in August, the consumption in the electric bicycle and automotive lead-acid battery markets did not show significant changes. Due to the sharp decline in lead prices, dealers exhibited strong risk aversion, and battery procurement was mainly based on just-in-time needs. Some lead-acid battery companies faced increased inventory pressure, leading to production cuts or shutdowns, causing the weekly operating rate of lead-acid batteries to turn downward. During this period, companies that had taken high-temperature holidays at the beginning of August resumed production, but this did not change the overall downward trend in the operating rate. According to the latest SMM survey, from August 10 to August 16, 2024, the weekly operating rate of lead-acid battery companies in five provinces was 67.11%, down 2.39 percentage points from August 9.

From a seasonal perspective, the lead-acid battery market typically enters its traditional peak consumption season in August-September, but this year's traditional peak season has yet to materialize.

Electric Bicycle Battery Market: In previous years, during the back-to-school season, the end-user consumption in the electric bicycle battery market improved, leading to a small consumption peak lasting from half a month to a month. However, since the beginning of this year, nationwide comprehensive rectification actions on the entire electric bicycle chain have been carried out, with high-pressure inspections on stores, indirectly affecting the sales of complete vehicles. Additionally, in July, many regions across the country experienced heavy rainfall, delaying the seasonal replacement of electric bicycle batteries.

Automotive Battery Market: Generally, after September each year, the automotive battery market enters the traditional "September-October peak season". However, this year, China's automotive industry is in a "cold winter" state. For example, European and American countries have increased tariffs on NEVs, prompting many companies to adjust their sales strategies, shifting from exports to domestic sales, and resulting in multiple rounds of "price wars." In comparison, NEVs have a significant price advantage, overshadowing the sales of traditional fuel vehicles. Following the decline in orders, automotive companies typically begin high-temperature holidays in July-August, dragging down the supporting orders for automotive battery companies. Additionally, since Q2, the SHFE/LME lead price ratio has widened, and with the rapid appreciation of the RMB in August, lead-acid battery exports have been significantly hindered. Some purely export-oriented lead-acid battery companies have even shut down for half a month to a month.