ZHUHAI, Sep 14 (SMM) – Automobiles drove the growth in lead consumption in China, said SMM senior analyst Xia Wenming.
China produced 16.1 million automobiles in January-July, up 3.52% from the corresponding period last year, she told delegates at the SMM Secondary Lead-Acid Battery Summit on Friday September 14 in Zhuhai, Guangdong province.
While the removal of purchase tax discount on cars may slow growth, China’s overall vehicle production continued to expand.
Xia added that the peak season this year came in April-May, earlier than usual, as surges in lead prices bolstered consumption and as inventories of finished goods at lead-acid battery producers stood lower than previous years. Consumption weakened in June-July, the traditional high season.
Market participants were particularly cautious this year, she said. Battery output grew just 1.5% on a yearly basis in January-July and distributors kept stocks at low levels.
Xia expects oversupplies of lead to ease in 2018 as output of primary materials shrinks and as the secondary sector undergoes a structural shift. She expects LME lead to trade at $1,885-2,380/mt in the second half of the year with its SHFE counterpart at 17,000-20,000 yuan/mt.