Scrap Battery Supply Shortage Forces Secondary Lead Smelters to Cut Production

SHANGHAI, May 13 (SMM) – Primary lead smelters are not the only victims of falling lead prices. Secondary lead smelters have also been forced to cut production against low lead prices and high costs. 

 

The price of secondary lead has been unable to keep pace with the decline in the price of primary lead due to stable scrap battery prices. The price of #1 refined lead has fallen RMB 1,000/mt since early March, while those of secondary and secondary refined lead have come down only RMB 700/mt and RMB 800/mt. Scrap battery prices, in contrast, have fallen a mere RMB 375/mt over the same period, even as secondary lead smelters in Hebei, Henan and Hubei, confronting losses, have tried to drive through RMB 150-200/mt cuts in their procurement bid prices. 

 

The push for lower prices left scrap battery traders reluctant to remain in the market. The resultant tightening in supply left secondary lead smelters to burn through existing input inventories and then to cut production.

 

Depressed demand also contributed to secondary lead smelters cutting production. Pressure to sell down finished-good inventories drove lead-acid battery producers into a price war in the April low demand season, but to little effect. The net result of the price war has been even lower demand for secondary lead. 

 

Several secondary lead smelters, including Anyang Jinpeng Lead, Anxin Huacheng Nonferrous Metals, Hubei Chukai Metallurgy, and Tianjin Dongbang Recycled Lead, have already cut production. Yuguang Gold & Lead has also announced plans to advance maintenance operations this month in response to sourcing difficulties and sluggish demand.