Operating Rate at Lead-Acid Battery Producers Down to 56.49% in June

SHANGHAI, Jul. 29 (SMM) – The average operating rate at lead-acid battery producers fell 0.68 percentage point during June to 56.49%, according to the most recent survey conducted by Shanghai Metals Market (SMM). This was the second lowest monthly average during 1H 2013, and due mainly to the severe liquidity crunch in June and the arrival of busy farming season.

 

Operating rates at ignition battery producers in June staged the biggest decline of all battery makers during the month. Replacement of ignition batteries was slow due to high summer temperatures, which pushed the average operating rate at ignition battery producers for June down by 4.79 percentage points to 57.34%. Automobile output in China during June was only 1.67 million vehicles, the second lowest monthly output of the year. Domestic motorcycle output was also flat at 1.9 to 2.0 million units, while exports to Africa and Southeast Asia, major consumers of Chinese motorcycle batteries, were also down during June.  

 

Motive battery producers saw a 0.42 percentage point MoM rise in the average operating rate to 47.89%. SME producers kept operating rates low since prices were close to cost lines and since they were holding high finished goods inventories. Some producers, however, reported improvements in orders and ramped up production in preparation for the upcoming high demand season for motive batteries in September. Although the average operating rate at motive battery producers showed little growth during June, SMM expects the average rate to rise significantly in July.

 

The average operating rate at backup battery producers grew 2.07 percentage points to 66.04%, but, orders for backup batteries remained soft. Since production at backup battery producers is usually stable, the uptick in the average operating rate was due mainly to higher rates at several producers supplying batteries for new 4G base stations. China Customs also reported that backup battery exports in June were only 10.31 million units, down 16.6% MoM and 21% YoY.