Global lead consumption will grow less than expected due to a slowdown in demand from Chinese lead-acid battery manufacturers, according to the Economist Intelligence Unit (EIU).
The EIU sees global lead consumption at 3.1% in 2014/15, down from an earlier estimate of 3.6%, primarily due to China continuing to destock lead battery supplies, emission monitoring is tightened and further outdated capacity is closed.
The latest estimates from the International Lead and Zinc Study Group indicate that lead consumption in China was down by 12.9% year-on-year in the first five months of 2014, having risen by 11% in 2013. The EIU expects China’s lead consumption will grow by an annual average of 4.9% in 2014-15, from 6.5% previously.
The lead-acid battery sector has shown mixed signals so far this year. Figures from the National Bureau of Statistics showed lead-acid battery production growth quickening, having stalled in early 2014, with output in the first four months up by 8.2% year on year. Exports of lead-acid batteries were up by 32% year on year in January-May.
However, recent statistics by Shanghai Metals Market showed the total inventory of seven listed companies – Sacred Sun, Dynavolt, Narada, Fengfan, Wolong Dengta, Chongqing and Camel – reached $667m, a rise of 5.82% year-on-year. The figures were compiled from the companies’ interim results.
The total processing and warehouse products rate of the seven companies stayed high at 55%-87%, which indicates lead-acid battery industry still needs more destocking.
Meanwhile, China’s Ministry of Industry and Information Technology is still contemplating a 5% consumption tax on battery producers and is looking to cut a further 8.5m kVAh of outdated polar-plating capacity this year, on top of the 25m kVAh cut in 2013.