SHANGHAI, Dec. 19 (SMM) - SMM surveys battery inventories at 30 Chinese lead-acid battery producers in December, including 17 motive battery producers, 10 ignition battery producers and 3 backup battery producers. Total annual capacity in the survey was 203.84 million KvAh and 3.97 million mt for total annual lead consumption. SMM finds that battery inventories at the surveyed producers average at 14.53 days in November, down 1.64 days than October’s level.
SMM attributes the decline in inventories mainly to two factors. First, demand for motive battery was moderate, but distributors were active in building stocks as lead prices surged in November. Orders at battery producers thus increased sharply. Moreover, suppliers held back sales due to tight lead supply and soaring prices in China’s market. Hence, operating rate at battery producers was restricted by insufficient raw material, and most battery producers arranged production schedule to mid and late December.
Second, ignition battery market was strong in November. Vehicle market was booming, growing ignition battery orders. Moreover, distributors built stocks with optimistic outlook as lead prices surged. In addition, as the end of year, distributors rushed to buy goods before price advanced further and some even finished the year’s purchase target ahead of schedule. However, ignition battery replacement demand was quiet in November. Inventories at battery producers dropped, because all of goods were transferred to distributors. So, inventories held by most distributors can be used for 2 months and some even can be used until next February to March 2017.
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