SHANGHAI, Sept. 18 (SMM) – Secondary lead producers in China frequently decrease purchase prices for scarp batteries for survival following the latest VAT rebate cut from 50% to 30%, SMM reports.

Capacity surplus, the VAT rebate cut and stricter environment protection inspections 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.

Henan Yuguang Gold & Lead lowered its procurement prices for scrap automobile batteries (white shell) to 6,870 yuan per tonne from early Sept.’s 7,000 yuan per tonne in just about 10 days. And Hubei Jinyang Metallurgy cut the prices below 7,000 yuan per tonne. Other secondary lead producers choose to reduce or halt production.

The amount of scrap batteries bought by smelters in August is generally below Jul.’s and should not grow in Sept.

Large secondary lead smelters have more troubles in buying scarp batteries after a cut in purchase prices with current mainstream prices at 7,050-7,100 yuan per tonne for scrap automobile batteries (white shell).

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