SHANGHAI, Sept. 16 (SMM) – Most Chinese secondary lead producers are now running in the red, SMM reports at the 2015 (5th) Secondary Lead & Storage Battery Summit.
“2015 is the toughest year yet for the domestic secondary lead industry,” most attendees said at the summit from Sept. 10-12.
Stricter environment protection inspections, capacity surplus, and the VAT rebate cut are blamed for the dismal condition of the sector.
“It is still profitable during the first half of 2015, but the conditions changed after the VAT rebate cut from July,” said Chen Jianfang, vice president of Jiangsu New Chunxing Resource Recycling Group.
Wu Xiaoyun, from Shanghai Xinyun Precious & Rare Metal Regenerateal Co. also said that the rebate cut was a big hit to qualified secondary lead companies.
At present, many large secondary lead producers have suspended production due to losses, while those disqualified ones are operating at high rates.
According to SMM survey, those qualified smelters have no sufficient raw material sources as high costs on environmental protection efforts make their procurement price for scrap battery unattractive. So approximately 80% of scrap batteries went to small and disqualified secondary lead producers.
“The scrap battery recycling system should be established, and relevant rules should be made accordingly, to enable qualified producers to survive,” Wu added at the summit held in Suzhou.
Wu also expressed his pessimistic outlook over lead prices due to weak demand in China and soft global economy growth.
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