SHANGHAI, Aug. 21 (SMM) – Lead price started rising from May 18 and accelerated the growth from late July and early August, jumping to 20,000 yuan per tonne from 18,000 yuan per tonne only in half of a month. Lead-acid battery price also traced lead price up sharply. What fueled the rapid growth? How will it strike downstream lead-acid battery?
SMM attributed five major factors to the surge.
First, all small secondary lead smelters closed down due to the fourth round of environmental protection inspections, tightening supply in China’s market.
Second, production was restricted by high temperatures in late July to mid-August.
Third, global leading mining company Glencore lowered annual lead output by 5%.
Fourth, lead grade dropped.
Fifth, global lead market was in supply deficit of 195,000 tonnes in January-June 2017, according to Bureau of Metal Statistics (WBMS). The figure was 172,000 tonnes in 2016.
Lead-acid battery price traced lead price up sharply.
Rising costs and environmental checks struck lead-acid battery recyclers and producers, despite of peak season.
All small battery producers in Zhejiang closed down on environmental checks, and some large producers also shut down. More than 90% of battery producers were called to halt output. Changxing accounts for 60% of lead-acid battery capacity in China.
Moreover, China’s environmental vice minister indicated to launch strict inspections on lead-acid battery and secondary lead sectors to control lead pollution.
Meanwhile, battery price increased as continuous growth in lead price pushed battery producing costs up. Retailers built stocks with optimistic outlook, though bicycle sharing slashed E-bicycle sales.
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