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Lead Battery Scrap Recent Update #21: Stronger due to increase of Chinese dismantlers, JPY70-80 in the future?

The domestic lead battery scrap market has been in a continuous decline since 2018, i.e., since the de facto export ban to South Korea, and has been at JAPAN prices that are completely different from the LME lead market and Asian lead battery scrap market this year.

 

That is because, as JOONILMETAL of Korea reported the other day (revisit JOONIL METAL to learn where Korea's lead battery recycling is now), US lead battery scrap is valued at 40% of the LME, but in the case of Japan it is 20%, the cheapest lead battery in the world, so to speak. The scrap market had stabilized, but the rise of Chinese dismantlers (so-called "battery splitters"), which had been a concern for some time, has been remarkable, and domestic secondary refiners have been forced to raise the purchase price of lead battery scrap due to their purchase price. Lead battery scrap is expected to reach JPY70-80/kg by the end of the year, the highest since August 2018.

 

Trends in Domestic Lead Quotation and Lead Battery Scrap Market Prices (yen/kg) for the Last Five Years

 

As the graph above clearly shows, even though the domestic lead price has risen, lead battery scrap has remained stable at around 50 yen per kilogram for what seems like an eternity. However, the market price has suddenly risen due to the entry and expansion of Chinese companies into the lead battery scrap dismantling market. The current purchase price for battery scrap from Chinese dismantlers has risen to JPY60/kg. Secondary refiners in Japan, sensing a crisis, have begun to raise their own buying prices to JPY58 /kg. Scrap traders believe that the market will continue to follow the buying price of Chinese dismantlers, and with some traders already offering prices as high as JPY70, they expect that this price will become commonplace by the beginning of the next year, even JPY80/kg possiblly.

 

In most cases, these Chinese-affiliated dismantling traders are originally general scrap metal and plastic recyclers who dismantle lead-acid batteries as a side business. In southern Osaka, there is a Chinese trader who handles 1,000 to 1,500 tons per month on a grid lead basis, and in Ibaraki Prefecture, there is a Chinese trader who also handles 3,000 tons per month on a grid lead basis. In addition, while there used to be a lot of illegal demolition, an increasing number of "major" traders are sending sulfuric acid solution, which is a problem, to industrial waste companies for proper disposal. This may not be the case for all traders. In addition, the lead extracted from dismantled batteries is also traded at a "good price," and some Japanese-affiliated companies are reportedly selling it to major Chinese dismantling companies in an increasing number of cases. The major dismantlers are reportedly quoting around JPY110/kg , almost the same price as domestic primary smelters.

 

However, it is not clear whether domestic primary and secondary lead smelters are buying this gid lead. We hear that most of them export it, mostly to Malaysia. Of course, exporting as grid lead is basically NG. It can only be exported under certain conditions. As is the case with lead battery scrap. Many exports to Malaysia are mixed cargoes with aluminum scrap and waste plastics. The reason for this is that lead is difficult to detect even after an X-ray inspection.

 

The expansion of Chinese dismantlers has been expected, but at least until this summer, none of the domestic lead refiners were paying much attention. They were just taking it easy, thinking that it was not a big deal.

 

But before they knew it (Its too Late now), the Chinese invasion of the lead battery scrap market had spread to the point where it could not be ignored, and had even become a driving force in the market. Just as water flows from high to low, scrap flows from cheap to expensive. This is the traditional marketability of scrap that cannot be changed.

 

To be frank, domestic primary and secondary lead smelters may have underestimated the movements of Chinese demolition companies. Taking the situation seriously, the lead smelters have reported the situation to the Ministry of Economy, Trade and Industry (METI) and the Ministry of the Environment (MOE), which are the regulatory authorities, and have asked them to strengthen on-site audits and supervision. However, in Japan, even if the Ministry of the Environment or METI comes to the site, they often end up only recommending close monitoring and guidance. I have heard in another case that they are not too concerned about preparing "a signboard of a different company" in case they are told something.

 

(JAPANESE VERSION)

https://www.iru-miru.com/article_detail.php?id=56387

 

 

(IRUNIVERSE YujiTanamachi, translated by S. Aoyama)

 

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