Costs, tight supplies keep battery scrap prices firm

SHANGHAI, Nov 20 (SMM) – Despite a low season across China’s lead-acid battery market, prices of battery scrap held firm as battery prices stayed at highs and as environmental probes tightened supplies, SMM believes.

In November 7-20, prices of motive battery scrap held stable at 9,950-10,100 yuan/mt and prices of automotive battery scrap (white shell) also remained barely changed at 8,900-9,050 yuan/mt, SMM assessments showed.

Battery scrap traders held their offers firm as high prices of batteries kept their costs at highs.

Regulation over solid waste recycling become more stringent after the central government began its second round of "environmental reviews" earlier this month. This made it harder for battery scrap traders without a licence or with expired licences to obtain lead-acid battery scrap. Supplies of battery scrap tightened across the market and supported the prices.

In the meantime, demand for battery scrap weakened as low-season demand for batteries and environmental probes suppressed operation across secondary lead smelters and held them back from purchasing battery scrap.

Firm battery scrap prices thinned profit margins across secondary lead smelters. SMM calculations showed that the margins shrank to some 200 yuan/mt, which eroded production enthusiasm among smelters.