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Lead-acid Battery Market Likely to Pick up in July
Jul 15, 2022 15:47CST
Source:SMM
Therefore, it is expected that the operating rates of lead-acid battery enterprises may increase by 3-5 percentage points in July. However, rising SHFE/LME price ratio will hinder the exports, and power rationing may re-stage amid electricity supply shortage in summer, which is already the case in Anhui. Follow-up attention will be paid to the impact of such factors on the production recovery of lead-acid battery enterprises.

SHANGHAI, Jul 15 (SMM) - The average capacity utilisation rate of lead-acid battery producers fell 0.5 percentage point on the month and 7.73 percentage points on the year to 60.6% in June, according to an SMM survey that covered a monthly released output of 15.02 million kVAh. SMM survey sample covered 50 enterprises with a total monthly capacity of 24.79 million kVAh.

According to the survey, with the official lift of COVID lockdown in Shanghai in June, the terminal consumption of lead-acid batteries recovered slowly, and the actual situation differed by battery type due to different policy orientation. For example, non-standard electric bicycles are about to be eliminated, and the purchases of new vehicles will boost the accessory market. But the performance of the battery replacement market was weak. Therefore, most companies maintained production reduction, and were closed for 3-5 days during the Dragon Boat Festival. In addition, from June 1, the purchase tax will be reduced or exempted for passenger cars with a displacement of less than 2.0, which is beneficial to the consumption of finished vehicles. The orders of relating enterprises rebounded, but the replacement market remained unchanged. Therefore, the operating rates across lead-acid battery producers dropped slightly.

Entering July, although the domestic pandemic situation is uncertain, there has not yet been a large-scale lockdown and control again, and the consumption in the lead-acid battery market continues to recover slowly. At the same time, the favourable passenger car purchase tax policy will continue to exert positive influence. And the lingering high temperature will shore up the demand for replacement of car batteries, which has boosted the production enthusiasm of lead-acid battery enterprises. In addition, there are no national holidays in July, and the working days will increase accordingly. Therefore, it is expected that the operating rates of lead-acid battery enterprises may increase by 3-5 percentage points in July. However, rising SHFE/LME price ratio will hinder the exports, and power rationing may re-stage amid electricity supply shortage in summer, which is already the case in Anhui. Follow-up attention will be paid to the impact of such factors on the production recovery of lead-acid battery enterprises.

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