China Motive Battery Price Gains to Be Curbed by Pessimistic Outlook, SMM Expects

SHANGHAI, Aug. 25 (SMM) – Recently, Chinese leading motive battery producers are said to continue hiking prices, such as 48v20Ah battery price up to 530-540 yuan. But the price gains may be curbed by expectation for the upcoming off-season in September, SMM predicts.

China Lead-Acid Battery Output Grows in H1 2016

End-user demand for motive batteries are modest at present in traditional peak season. Also, price hikes led by leading battery makers since July push downstream purchase, cutting stocks at battery producers. Moreover, goods ordered by distributors in early August have not arrived yet with transport disrupted by the G20 Summit in Hangzhou. This leads to supply tightness of famous batteries, which also drives up wholesale prices.

However, battery replacement demand will weaken in September with weather turning cool, boosting market bearishness. Some distributors thus started cut purchase since late August.  Additionally, most traders have not received goods yet due to transport disrupt, affected by the summit, which nonetheless, will come to an end in early September This will lead to intensive arrivals of goods, boding ill for battery prices.

Growth in lead prices in past 2 months also give support to battery price hikes. But the growth in lead prices may be damped by growing supply in the future, supported by operating restart at smelters due to easing of environmental protection inspections. As such, lead prices will unlikely continue giving rising strength to battery prices later. 

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