SHANGHAI, Aug. 22 (SMM)--With shortages in China's lead-acid battery supply becoming ever more apparent, some large producers have raised their ex-works prices yet again just in the last few days, on the heels of July's hikes.
The result of the inspection and rectification campaign undertaken by local environmental protection bureaus on China's 1744 lead-acid battery producers was that a mere 252 remain in production, not quite 20% of the original number. The impact on actual production capacity is not quite as dire as this ratio suggests in that the majority of those producers that remain in operation are large-scale manufacturers. Nevertheless, supply has contracted, and the shortages have prompted remaining producers to raise prices.
According to industry sources, this price hike primarily hit motive batteries with ex-work prices up 5-10%. The shortage in motive lead-acid batteries is becoming all the more acute and apparent. Not only is there the existing shortage in the wake of environmental inspections, but the country is entering the peak season for sales of new electric bikes, further highlighting supply shortfalls.
The situation is different with regard to the ignition battery industry. Companies such as Fengfan and Jujiang have not adjusted their ex-works prices. Medium-sized enterprises in Anhui, Guangxi and Guangdong, however, have raised prices, with the average hike in the vicinity of 5%, higher or lower depending on the local supply situation. Price hikes for ignition batteries have hit as much as 15% in regions where supply shortages are most acute.
Inasmuch as production at large ignition lead-acid battery producers such as Fengfan, Jiangsen and Camel, was not significantly impacted by the environmental protection inspections, China is unlikely to experience severe shortages in this segment when seasonal demand peaks in the fourth quarter.