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September Operating Rates at Lead-Acid Battery Producers Down
Oct 30,2012 09:08CST
smm insight
Source:SMM
The latest survey conducted by SMM showed the average operating rate at domestic lead-acid battery producers in September was 60.60%.

SHANGHAI, Oct. 30 (SMM) – The latest survey conducted by SMM showed the average operating rate at domestic lead-acid battery producers in September was 60.60%, down from 62.20% in August.

Operating rates at ignition lead-acid battery producers averaged 62.37%, up 4.28 percentage points MoM, but the average operating rate at motive and backup battery producers was down from a month ago. Automobile output in China during September climbed to a six-month high of 1.6608 million vehicles, up 10.62% MoM and 3.67% YoY. Motorcycle output also rose 6.16% MoM to 2.0778 million units. The growth in automobile and motorcycle output also gave a boost to operating rates at ignition lead-acid battery producers, with only production at enterprises manufacturing batteries for Japanese cars reporting declines. Colder weather has now begun to accelerate replacement of ignition batteries. Since automobile and motorcycle ownership in China has now exceeded 100 million, the need for battery replacement also lifted orders at ignition battery producers.
 
Operating rates at motive lead-acid battery producers has been falling since a high in June,  averaging only 60.85% in September, down 1.75% MoM, so SMM believes the high demand season for motive batteries has come to an end. Price wars in motive battery markets are intensifying, with price difference between leading and other brands narrowing to RMB 50/set, and causing a surplus of batteries in the market. SMM expects the balance of supply and demand should only be achieved when demand recovers. Operating rates at producers will unlikely improve noticeably unless price gap between well-known brands and other brands expands.
 
The average operating rate at backup battery producers fell by 3.4% to 64.84% in September, also a record low, and according to backup battery producers, operating rates were down due to the sharp decline in backup battery exports. Orders for backup batteries are expected to fall further in October.

 

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