China Dynamics Causes World Lead Oversupply

Chinese lead pollution impacts Chinese battery production. A source in Japanese trading firm said almost all battery production stopped in Guangdong due to the pollution. The lower lead demand in China could impact on balanced world lead supply.

Automotive lead battery plant increased in China in recent years. The battery plants are the leakage source recent years while lead smelters’ leakage gets improving with severe control by the government. Many plants of a thousand of battery plants in China fail to meet environmental standard.

Chinese government tries to improve the lead pollution by stopping operation of such lead battery makers. Japanese source said Chinese battery supply gets tight while the lead supply gets loose. The waste battery market decreases when secondary refineries reduce the purchase volume. Japanese source said Chinese waste battery price decreases from more than 100 yen per kilogram.

Chinese lead import decreased by 86% to just more than 20,000 tonnes in 2010 from 2009. The import decreased due to new domestic smelting capacity while the country showed strong appetite since the country turned into net import in 2006. Chinese oversupply is apparently one of the reasons of overstock in the world when world lead stock registered to London Metal Exchange hit 16-year high of 320,000 tonnes.