Japan Battery Makers Seek Offshore New Lead Supply Sources

Japanese major battery makers are seeking new lead suppliers when material shortage is domestically concerned in and after spring of 2012. One major smelter in Japan will withdraw from electrolytic lead production at the end of March. Domestic secondary lead refineries are suffered from low operation due to used battery outflow to offshore market. Battery makers consider long-term contract conclusion with offshore lead supply sources.

Sumitomo Metal Mining announced the firm finishes electrolytic lead production at Harima smelter in Hyogo, Japan at the end of March 2012. Domestic electrolytic lead supply is estimated to decrease by 2,000 tonnes per month in and after April, about 10% of Japanese total output.

On the other hand, Japanese used battery export continues at 2,000-4,000 tonnes per month when South Korea’s secondary lead refineries offer high price. Then Japanese secondary lead refineries are suffered from material shortage and operating rate stays as low as 50%.

Japanese major battery makers consider cultivation of new long-term material supply sources under such domestic situations. Battery makers examine lead import from South Korea and Thailand based on long-term contracts. Some of battery makers have already started actual material procurement from new suppliers.

Global supply and demand balance of lead has loosened in past few years while lead supply to Japanese consumers hasn’t been stable. China turned to the net import country of lead. Peru had been the largest lead exporter to Japan until 2008 but the shipment stopped due to supply troubles such as strikes at the mines. Major lead exporters to Japan are recently Canada and UK. However, Japanese users are unwilling to increase lead import from the countries due to high premium.