SHANGHAI, Apr. 28 (SMM) – SMM’s latest survey of domestic lead-acid battery producers reveals the average operating rate at the surveyed producers during March increased by as much as 18.27percentage points MoM to 60.45% due mainly to a return to full production following the Lantern Festival on February 24th.
The average operating rate at ignition battery producers rose from 41.92% to 61.49%, a sharp increase of 19.57 percentage points from the previous month and due to the onset of the seasonal peak demand period for motive batteries which runs from March to May. Data from the China Association of Automobile Manufacturers showed China’s automobile output soared by 55% MoM in March to over 2 million vehicles, boosting demand for ignition batteries. Motorcycle output also recovered, but battery demand from the motorcycle sector was still less than from the automobile sector, forcing some producers, such as Guyue Storage Battery, to cut prices by 5%.
Operating rates at motive battery producers averaged 52.62% in March, up 16.75 percentage points from February’s 35.87%. However, producers reported poor orders due to depressed demand from end users. In addition, lead prices continued to fall after the Chinese New Year holiday, turning battery traders bearish and cautious toward purchasing goods. As a result, finished battery inventories at producers increased.
The average operating rate at backup battery producers rose in March by 18.94 percentage points MoM to 69.81%, the highest average rate among the three types of battery producers. Data from China Customs show backup battery exports in March hit 86.27 million units, up 17% MoM, helping lift operating rates at producers. Domestic orders, however, showed little improvement.