A global lead supply deficit and weaknesses in China’s lead industry will trigger a spike in lead prices, delegates at the Battery Council International (BCI) conference were warned.
China’s continuing crackdown on the lead battery industry, a weakness in smelting capacity and the country’s inability to put in place a proper battery recycling system were given as reasons for the potential spike in Q4 of this year.
While never going as far as to say it would occur, Farid Ahmed, principal lead analyst with Wood Mackenzie, alluded to the very real possibility at the BCI meeting earlier this month.
Ahmed laid out another ‘perfect storm’ scenario in a meeting packed to the gunnels with bad news, which included David Weinberg, legal advisor to BCI, predicting the industry faced some of the biggest threats to its existence in the next few months.
With lead prices at a five-year low alongside all commodity metals, Ahmed attempted to give some clarity in a market where the China factor appears all important but is in fact only a part of the problem.
The economic slowdown really isn’t an overwhelming concern and Ahmed said the Chinese battery industry will concentrate on domestic self sufficiency rather than battery exports.
This is a consequence of the China lead-acid battery industry being reduced and consolidated with fewer players, although battery production has actually risen and smelter capability reduced.
These factors, combined with a poor record on recycling and flat primary lead production, look certain to create shortages of the metal, Ahmed explained.
Pressed as to when this would occur, Ahmed said that if he knew that he would be a very rich man.
Ahmed’s presentation was followed by old-stager Dick Amistadi, who painted a gloomy picture on secondary smelting capability in the USA.
In a comment to BBB, Amistadi agreed that the only way prices could go later this year was up.