SHANGHAI, Aug 2 (SMM) – Growing demand from producers of secondary lead and shorter supplies of battery scrap accounted for the slower decline of scrap prices over lead prices.
Lead prices weakened over 2,600 yuan/mt from a month ago, while prices of battery scrap fell some 400 yuan/mt in July.
As traders recycled battery scrap at high prices in May-June when lead prices soared, they were unwilling to let go of cargoes at lower prices in July as profits narrowed. This also accounted for the slower dip in prices of battery scrap.
Local governments shut some waste battery recycling plants in Guangdong, Jiangsu, and Hubei provinces in July, due to China's stricter controls on solid waste recycling. SMM learned that it is increasingly difficult for unqualified traders to recycle waste batteries that contain acid. This further tightened the supply of waste batteries.
Demand for raw materials grew as more small and mid-sized secondary lead smelters returned from environmental suspensions.
While short supplies are unlikely to ease in the short term, demand may weaken as some small secondary lead producers are expected to cut production or suspend on shrinking profits. Prices of battery scrap are likely to have further downward room, SMM forecasts.
SMM assessed the price of #1 lead at 18,400-18,500 yuan/mt as of Thursday August 2, down an average 2,700 yuan/mt from July 2.
As of August 2, prices of secondary refined lead stood at 18,250-18,350 yuan/mt, down some 2,650 yuan/mt from a month ago, while prices of waste electric vehicle batteries fell 450 yuan/mt from July 2 to 10,000-10,100 yuan/mt.