Chinese Battery Producers to Cut Output as Lead Surges, SMM Says

SHANGHAI, Nov. 28 (SMM) – On Nov. 25, SMM #1 lead price was offered at 19,850-20,000 yuan per tonne, up 3,525 yuan from November 1 and surging 21.49 per cent in a single month, also hitting the highest level since April 28, 2008.

Surging lead prices have added big pressures to Chinese battery producers, SMM survey finds.

What’s Behind Skyrocketing Lead Price? SMM Reports

“Many domestic battery producers now plan to cut or even suspend production in response to the surge in production costs,” SMM lead analyst says.

According to SMM survey, domestic battery producers began raising battery prices due to rising costs on November 15 when spot lead climbed above 18,000 yuan per tonne in China’s market, and some producers even stopped receiving new orders.

China’s spot lead prices kept soaring on November 17 and 18, and broke through 20,000 yuan per tonne. Most battery producers thus suspended lead purchases and also stopped receiving new orders, or revalued battery price according to lead prices, especially in motive and ignition battery markets.

Currently, most mid and large-scale battery producers are discussing cut plans, but production so far has not been affected immediately due to unfinished orders and arrival of month-end, SMM survey shows.

If China’s spot lead prices stay firm, a large-scale production cut is expected at domestic battery producers in December, SMM predicts.

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