SHANGHAI, May 21 (SMM) – SMM research points to secondary lead smelters having tried in vain to cut scrap battery prices. Scrap battery traders have shied away from selling at lower prices, restricting supply to the point that secondary lead smelters have had to raise their procurement prices by RMB 50-100/mt.
Europe’s ailing economies sent spot lead prices tumbling in April. The price of #1 lead fell nearly RMB 500/mt from March’s RMB 14,550/mt. Scrap battery prices, in contrast, only inched down RMB 100/mt by April 22. Secondary lead smelters attempted to cut their scrap battery procurement prices RMB 150-200/mt in response.
Few scrap battery traders, however, evinced much interest in selling at the reduced price, leaving secondary lead smelters to deplete existing input inventories and then to cut output as raising prices to avoid greater losses remained impracticable.
The tug of war over prices between smelters and scrap battery sellers continued through the month, but battery traders refused to budge and sat on their inventories. Slowing battery replacements caused by rising temperatures exacerbated supply tightness, leaving secondary lead smelters no choice but to raise procurement prices so as to maintain normal production.