Average Operating Rate at 51 Chinese Battery Makers down to 62.12% in March, SMM Reports

SHANGHAI, Apr. 8 (SMM) - SMM survey of 51 Chinese lead-acid battery producers, with monthly capacity of 22.03 million kvah, finds that average operating rate at those surveyed was 62.12% in March, up 3.35 percentage points MoM but down 4.41 percentage points YoY. Total production was 13.68 million kvah.

A total of 14 battery makers, annual capacity above 5 million kvah and monthly capacity at 15.44 million kvah, saw production at 15.44 million kvah in March with average operating rate up 4.17 percentage points MoM to 68.75%.

The rate at 31 battery makers, annual capacity between 1-5 million kvah and monthly capacity at 6.39 million kvah, was 46.15% in March, up 1.24 percentage points MoM with output at 2.95 million kvah.

In March, about 6 battery makers, annual capacity between 100,000-1 million kvah and monthly capacity at 203,400 kvah, reported average operating rate at 59.95%, up 7.21 percentage points MoM. Output came in at 122,000 kvah.

SMM also finds the following insights by type of batteries:

Approximately 27 motive battery makers, monthly capacity totaling 10.36 million kVah, saw output at 5.96 million kVAh in March. Average operating rate was down 3.16 percentage points to 57.52% MoM. In March, poor demand and weak lead price raised distributers’ risk aversion sentiment, which rushed to clear stocks by promotions. Meanwhile, those distributors reduced battery replenishment, lowering orders at battery producers. Battery producers thus cut 20-30% of output and some battery producers even cut output twice in one month. So, operating rate declined in March.

Average operating rate at 16 ignition battery producers, monthly capacity at 8.25 million kVAh, was 66.26% in March, up 9.01 percentage points MoM. Production was 5.47 million kVAh. Off-season in ignition battery market came ahead of schedule in March as demand was released in advance before 2017 Chinese New Year holiday and weather was warm in winter. Moreover, distributors showed low purchase interest with pessimistic outlook in response to weak lead price, resulting in poor order at battery producers. Some battery producers started cutting output and reducing inventories. However, operating rate increased on a monthly basis because of rising workdays, but it declined on a yearly basis.

Average operating rate at 8 backup battery makers, monthly capacity at 3.42 million kvah, rose 9.41 percentage points MoM to 66.03% in March with output of 2.25 million kvah. In the month, orders at most battery producers remained quiet due to off-season. Besides, battery producers reduced operating rates with risk aversion sentiment resulted by weak lead price. But, operating rate rose from February’s level due to rising workdays.

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