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Surging Spot Lead Stimulates Downstream Stock-Building Demand, SMM Surveys
Nov 22,2016 11:42CST
smm insight
Source:SMM
Downstream distributors, who expect prices to rise, built up stocks. Orders thus increased at most battery producers, leading to tight battery supply in China’s market.

SHANGHAI, Nov. 22 (SMM) – SMM #1 lead increased in a row since July and broke through 18,000 yuan per tonne on November 15, up 40.63% from the level on June 30.

Battery producers raised prices up due to rising production costs, such as motive battery 48v12Ah up to 350 yuan from 230 yuan in late June. Downstream distributors, who expect prices to rise, built up stocks. Orders thus increased at most battery producers, leading to tight battery supply in China’s market.

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SMM learns that production schedule at battery producers, including motive, ignition batteries and batteries for three-wheel bicycles, has been arranged to December, or even to mid-late December.

Orders remain robust in motive and ignition battery end-user market, despite of off-season in November, supported by stock-building demand from distributors with bullish outlook. Most battery producers worry that demand is consumed ahead of schedule and producing costs also increased with rising lead prices. Hence, some battery producers stop presales, or even limit purchase volumes to cool down overheat purchases.

 

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