Japan Lead Battery Makers Raise Operation Rate with Better Demand

Japanese lead battery makers started to meet higher demand in summer by building inventory for replacement battery after the inventory adjustment. The makers increased the production since April after the 50% production cut in January-March from same period of 2008. Some makers’ operation reaches 90% level in June.

The replacement battery is fixed price system in Japan while battery price for new vehicles is depending on market price of metal. The replacement battery makers tried to increase the selling price by 20-30% in 2007 when lead price reached near US$ 4,000 per tonne at London Metal Exchange.

The buyers accepted the price hike while the buyers built inventory. The inventory became burden when the demand decreased in 2007 and 2008 along with slower economy.

The battery makers’ production for automobile battery decreased by 49.3% to 27,260 tonnes in lead volume in January-March from same period of 2008, according to Ministry of Economy, Trade and Industry. With the lower demand, monthly 7,000-10,000 tonnes of Japanese lead including alloys were exported for China and Southeast Asia since February.

The demand is increasing for lead metal including secondary lead metals. However, the secondary makers are in trouble to secure waste battery under competition with exporters. Japanese refineries pay around 35 yen per kilogram for waste battery while the export price is 5-10 yen higher for South Korea. With the price gap, the export was estimated to be more than 5,000 tonnes to South Korea in May.