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Battery production in China wobbles as car sales stall

Tue, 04/16/2013 - 18:36 -- Ruth Williams

Lead-acid battery makers in China have suffered a slump in production to 42.18% of capacity during the first quarter of this year. Weak downstream demand is being blamed for the January to February production fall of 16.7%, according to BEST’s source in China. 

Between January and February the operational rate of SLI battery companies fell from 65.5% to 41.9%. It is speculated this has happened for a number of reasons; firstly the Chinese New Year holiday meant some production slowed or ceased.

Secondly, SLI demand has drastically fallen in line with the decrease in car production. Car production in February drastically fell by 31.4% to 1.34 million from the previous month. Car sales were concurrent to this slump, sliding to 1,040495 for February, by March sales had risen to 1,459095 but this remained below the January figure of 1,704185.

The third attributable factor is the falling price of lead, which led to SLI battery distributors minimising stock levels – causing an increase of stock at the production end. This surplus of batteries meant the producers lowered the number of batteries produced and cut prices to shift the surplus. The price of lead is not expected to rise until the second half of 2013. With the price of lead low in China, overseas buyers are less willing to purchase exported batteries at the normal price. 

It is not just SLI battery makers feeling the slump, motive power battery producers operating rate dropped to 35.87% in February – a fall of 12.47% on the previous month. As with SLI makers, motive power battery producers experienced lower demand than previous months.

Stationary and back up power producers have retained a higher rate of operation at 50.87% for February, but even this is lower than the figures for January of 64.2% production.