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Chinese battery demand growth seen boding well for lead

Keywords: Tags  lead, Chinese demand, e bicycles, lead-acid batteries, Beijing Antaike Information Development, Liu Yanlong, China Industrial Association of Power Sources, China International Lead and Zinc Conference

NANJING, China — Lead might have disappointed many toward the latter half of the year, but industrial experts and officials at the 2012 China International Lead and Zinc Conference remained bullish about its outlook.

"The lead-acid battery sector is booming, but the demand for lead is so bad (that) there is just no hope this year for lead prices to turn around," a lead trader said on the sidelines of the conference in Nanjing.

A major lead-acid battery maker and exporter that consumes about 8,000 to 10,000 tonnes of lead per month said that it was operating at full capacity from January to August this year, but noted that its export booking orders unexpectedly shrank about 40 percent in September.

However, the fall hasn’t dampened the outlook of all market participants.

Beijing Antaike Information Development Co. Ltd. expects China’s lead consumption to rise 12.6 percent to 4.51 million tonnes in 2012 and to 4.9 million tonnes in 2013. By 2015, the country’s annual demand will reach 5.46 million tonnes.

Some participants are looking at the electric bicycle sector, the biggest lead consumer in China, to drive growth.

There are 150 million electric bicycles in China; the number is growing by 30 million per year. More than 95 percent of these bicycles use lead-acid batteries, according to Liu Yanlong, general secretary of the China Industrial Association of Power Sources.

"There is a huge demand for lead-acid battery from the e-bicycle sector," Liu said, as these bicycles need new batteries every year. He added that the Chinese could have 200 million electric bicycles by 2015, with annual output rising to about 40 million units.

China’s lead-acid battery output could rise by 15 percent annually from 2011 through 2015, Liu said. The electric bicycle sector accounted for around 39 percent of China’s lead consumption in 2011.

Other participants point at the automobile industry, especially low-speed electric cars, as a source of demand.

In Shandong province, the leading region for electric cars, sales surged 74.8 percent year on year in the first six months of 2012 to 43,900 units. The city of Zibo in Shandong plans an annual output of 100,000 units by 2015. An electric car consumes about 441 pounds of lead, according to Chen Hongyu, a professor at South China Normal University in Guangzhou.

Energy-storage batteries are also expected to post growth in the coming years.

"The government has been encouraging the use of energy-saving lead-acid batteries on buildings. The use of such batteries will grow. We also need to thank anti-dumping measures by other countries, as it reminds us that there is demand in the domestic market," Cao Guoqing, deputy secretary-general from the Beijing-based China Battery Industry Association, said.

"This is the dawn of the lead industry, as another spring of lead-acid is about to come," Chen added.

A version of this article was first published by AMM sister publication Metal Bulletin.

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