Battery Producers Cut Output Further in Off-Season, SMM Says

SHANGHAI, Mar. 27 (SMM) – As motive and ignition battery both were in off-season in March, inventories at most battery producers increased. Battery producers thus cut output successively from early the month and some producers even cut output further recently.

SMM surveyed 10 lead-acid battery producers and found that operating rates at two of them were at 80%, 3 were at 70%, 2 were above 90% but planned to cut 20-30% later, 2 were at 70% but planned to cut to 50% from last week, and 1 planned to close down for a week.

First, end-user market demand is poor due to lead-acid battery off-season in March, lowering inventories consumption at distributors. Moreover, with weak lead prices, distributors, predicting battery price to drop, took risk aversion sentiment. So, battery promotions made little effect, growing battery inventories. Inventories at some producers even can be used for more than one month.

Second, most battery producers were negative on lead prices in April-May. Moreover, battery producers, considering cost and high-price inventory, chose to cut output further to reduce inventories.

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