SHANGHAI, Jan. 30 (SMM) – China’s scrap batteries are in short supply as many traders in Zhejiang have suspended operations, SMM’s recent research shows. The tightening scrap battery supply is likely to lend some support to lead prices, SMM holds.
A large number of traders have ceased operations in Ningbo. Scrap battery supply is tight in the city as many battery retailers refrain from selling against low prices. Even licensed companies report less than 100 tonnes of daily scrap battery purchases, well below previous 300 tonnes.
Scrap battery supply is comparatively sufficient in Zhejiang’s Changxing which hosts a large number of lead-acid battery producers, enabling battery produces to sell normally. However, scrap battery traders in the region confront operation difficulties from meager profit margins.
With 100-150 yuan per tonne of transporting expenses, traders can generate less than 50 yuan per tonne in profits to sell scrap electric bicycle batteries at an ex-works price of 6,900 yuan per tonne to Anhui and Shandong. Secondary lead smelters in these two provinces offered bid prices on scrap batteries at 7,050-7,100 yuan per tonne. These traders used to earn about 200-300 per tonne perviously.
Tight scrap battery supply is a major reason behind recent shortages of secondary lead, which should help floor lead prices.
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