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May’s Average Operating Rate at Lead-Acid Battery Manufacturers Falls Below 60%
Jul 1,2013 18:46CST
data analysis
SMM conducted a survey to China’s major lead-acid battery manufacturers, finding that the average operating rate at the surveyed manufacturers fell below 60% during May to 57.17%.
SHANGHAI, Jul. 1 (SMM) – SMM conducted a survey of China’s major lead-acid battery manufacturers and found the average operating rate during May fell to 57.17%, a decline of 3.14 percentage points MoM. 
The average operating rate at ignition battery manufacturers fell slightly from April’s 62.46%, to 62.13%, and was due to two major reasons. First, data from the China Association of Automobile Manufacturers show China’s automobile output during May was only 1.78 million vehicles, the second lowest monthly output this year, lowering demand for replacement of ignition batteries. Second, the average lead price fell from April’s RMB 14,080/mt to RMB 13,780/mt in May. Since lead-acid battery prices are greatly influenced by lead prices, continuous declines in lead prices lowered demand from battery traders as falling prices increased their risk of stockpiling goods. 
Motive battery manufacturers saw the largest decline in operating rates among all lead-acid battery manufacturers, with May’s average rate down from April’s 51.64%, to 47.47%, a drop of 4.17 percentage points MoM. Tianneng Power and Chaowei Power cut prices for 48V 12Ah battery from RMB 320-330/set to RMB 300/set, eliminating any price advantage from small battery producers and causing many SMEs to halt production. Meanwhile, slowing demand for electric vehicle and forklift batteries during May was also a factor in the decline in operating rates. 
The average operating rate at backup battery manufacturers fell 5.31% in May to 64.33%, down from April’s 69.64%, but was still the highest average among the three battery producers. The lower average operating rate is a reflection of poor sales, but some large manufacturers still benefitted from construction of new 4G communication base stations owned by China Unicom and China Mobile.


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