Battery Inventories at 30 Lead-Acid Battery Producers Rises in March, SMM Surveys

SHANGHAI, Apr. 24 (SMM) - SMM surveys battery inventories at 30 Chinese lead-acid battery producers in March, including 17 motive battery producers, 10 ignition battery producers and 3 backup battery producers. Total annual capacity in the survey was 201.77 million KvAh and 3.93 million mt for total annual lead consumption. SMM finds that battery inventories at the surveyed producers average at 30.64 days in the month, up 2.62 days from February’s level.

SMM attributes the decline in inventories mainly to two factors.

First, downstream distributors rushed to build stocks in Q4 2016, consuming demand ahead of schedule. Moreover, motive and ignition battery market entered into off-season in advance because of warm weather in winter, reducing end-user market demand. As inventories at were consumed slowly, distributors had low purchase interest, decreasing orders at battery producers sharply. In addition, many battery producers cut output successively in March due to poor consumption. However, battery output increased in March on a monthly basis because of rising workdays.

Second, battery producers with pessimistic outlook, and distributors and traders with risk aversion sentiment, undersold batteries in China’s market. Distributors were active in clearing inventories by promotions and were wary of purchases. Inventories at battery producers stayed at highs despite of promotions and output reduction.

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