2015.07.01 12:05

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 LME lead price dropped by $375/t for the past one and a half months to $1,765/t on 22 June from $2,140/t on 5 May. Japanese domestic lead price quoted also dropped by JPY36/kg to JPY279/kg on 22 June from JPY315/kg on 1 May. 

 

 

 

 

 If the LME metal prices drop, prices of related scraps also decrease. But, the same doesn’t go especially for recycled lead battery price. In Kanto region, the prices of recycled lead battery from automobile are still at JPY93-97/kg ex yard (tax excluded) as the exporters have not yet decreased the purchases. They are offering higher prices tax included such as JPY103-105/kg, but Japanese domestic lead smelters don’t purchase at this level, which makes little profit.

 

 A purchasing staff from a major lead smelter producing more than 2,000 tons of lead ingot 99.99%min per month claimed, “When LME lead flat is at JPY240/kg, battery scrap being at more than JPY100/kg makes no business sense. Lead contained in battery scrap is half of the weight, so the net lead price will be worth JPY200/kg. That doesn’t bear even refining charge.”  

 

 Primary lead smelting companies using lead concentrate as raw material don’t purchase scrap at higher prices. But, in order to secure enough raw material for production, secondary lead smelting companies using scrap as main raw material have to purchase scrap even if the prices are at higher level. So, they have still had severe difficulty in gathering the material.

 

 Only the prices of battery for automobile are not higher. Even industrial battery and sealed lead battery which originally should be sold for compensation are traded completely as valuable materials. Industrial battery is traded at around JPY75/kg (tax excluded). Sealed battery is at around JPY65/kg (tax excluded). Battery for forklift, which seems to flow to the reuse market rather than to be recycled due to its expensiveness, is at around JPY80/kg (tax excluded).

 

 Also, UPS shipped to Korea and China is traded at higher prices.

 “The UPS shipment for Korea loaded orderly into containers is a little less dangerous than that for China, which is loaded as miscellaneous item. It’s very dangerous,” a scrap dealer in Northern Kanto region pointed out.

 

 In fact, UPS with electric code may catch fire by some sort of impact. One of the causes of fires occurred by miscellaneous items is said to be UPS. But, quite honestly, the generators of UPS are to blame. The problem is their low awareness to sell the materials with possibility of fires as miscellaneous items if the purchase price is high. (Surprisingly, not a few generators who have such a low awareness of environment and recycling are belonging to big corporate groups.)

 The government should investigate the situation of UPS distribution to question the responsibility of generators.

 

Ravaged exporters

 As mentioned above, the prices of recycled lead battery from automobile haven’t dropped along with falling LME lead. Exporters in question are said to be ravaged by extreme competition for raising prices.

 An exporter heavily criticized people in the business saying, “It’s impossible to gather materials at JPY93/kg ex yard. But, we limit ourselves. We don’t make a losing trade. Who would gain a profit at the market where nobody can make a hand? They are crazy.”

 And, a source from a lead smelter said, “So many dealers newly have entered in the recycled lead battery business in the past few years considering it profitable that the prices rose. But, as every dealer purchases at high price, margins have lowered. As exporters are also dead-beat, the prices will not rise further.”

 

 According to the Japanese statistics of foreign trade, 7,000 tons of recycled lead battery was exported to Korea in April.

 15,000-20,000 tons of recycled lead battery from automobile seems to generate per month in Japan, of which nearly half is exported.

 On the other hand, Korea imports more than 30,000 tons of recycled lead battery per month from across the world. A Korean lead smelter said that they purchased more recycled batteries from Japan as they were “cheaper”. But, lead battery product is known for its price-cutting competition and its unreasonable market where the prices don’t response even to significant rise in LME lead price. 

 

 After having repeated excess investment in endless competition of production capacity, Korean lead smelters such as Anicas Metal and Dansuk Industrial resulted in deficit. Korean battery manufacturers also seem to experience declining incomes due to strong Korean Won and weak Japanese Yen and race with Chinese battery products. Japan and Korea have entered into a war of attrition. Unnecessary purchases at higher prices only make end collection trader glad. It’s nonsense that lead smelters who should originally reap profits are suffering from deficits.

 If I were to express an extreme opinion, some sort of boarder line should be set by the coordinated activity of Japan and Korea.

 

（Edited　By　O.Sasaki）

 

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