SHANGHAI, May 13 (SMM) – Tianneng Power and Chaowei Power cut the prices for 48V 12Ah batteries from RMB 320-330/set to RMB 300/set over the May Day holiday.

One consequence of the environmental protection crackdowns in 2011 was the aggressive capacity expansions pursued by China’s surviving, large lead-acid battery producers last year. Environmental Protection Offices reported that the aggregate capacity of these lead-acid battery producers hit 256 million KVAH in December. Last year’s output, however, was 170 million KVAH, equating to capacity utilization < 70%. The annual reports of China’s listed battery producers indicated high inventories as well. Inventories at Tianneng Power and Chaowei Power surpassed RMB 1 billion.

Rising temperatures typically lead to a sag in lead-acid battery demand in Q2. That, combined with mounting overcapacity and the decline in lead prices from RMB 14,300/mt to RMB 13,700/mt in April, is driving producers to cut battery prices further.

Most recently, Tianneng and Chaowei cut the price of electric vehicle batteries another RMB 3/unit to a 5-year low of RMB 300/set.

SMM surveys, however, indicate that few other producers plan to follow suit as prevailing battery prices are already below their costs.