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Lead Battery Scrap 2023#4 New distribution routes are sprouting and there is a signs of tightness

In mid-May, the domestic market for lead battery scrap showed an unbalanced situation, with a slight nationwide shortage, a strong shortage in some areas, and a surplus in others. The oversupply is at primary lead smelters in western Japan, which have been forced to halt the loading of grid-lead as they are overflowing with inventory of grid-lead for recycling due to the two-month long period of regular furnace maintenance. The price of grid-lead has remained unchanged from around 103 yen per kilogram in April.

 

However, other manufacturers, especially secondary smelters, are feeling a tight inventory of raw materials. The Kansai region, in particular, is said to be in a severe situation. This is due to the fact that Chinese and Vietnamese buyers as new routes are becoming more active. Their buying prices for automotive lead battery scrap are 58-60 yen per kilogram, motorcycle batteries 50-55 yen, and industrial batteries 30-40 yen. Their bidding prices are also pulling up those of Japanese-affiliated refiners. Newly ambitious collectors appear to be emerging in Kyoto in the Kansai region and in Chiba in the Kanto region. Bullion production by Okada Shoji in Mie Prefecture is still in the testing stage. Mihana in Iwate Prefecture has announced that it has obtained a license, but there is no movement in sight. Neighboring manufacturers do not seem to have any information either.

 

 Scrap Lead Battery Prices Will Not Fall Even as LME Lead Prices Fall

 

Trends in LME lead prices and lead battery scrap prices

 

Trends in Lead Quotation and Exchange Rates

 

As shown in the above chart, even if LME lead market prices fall, scrap prices have not fallen; in fact, they have risen. The Japanese market is still inexpensive compared to lead battery scrap prices in Asia, so there is still room to raise prices in light of the price difference with overseas markets.

 

“Even modestly, the price will probably exceed 70 yen within this year," said a source who handles lead battery scrap.

 

Demand for lead-acid batteries has not declined. This may be due in part to the fact that Japan still has a low EV ratio.

 

However, few domestic lead smelters, including primary and secondary smelters, are operating at full capacity. There are a variety of reasons for this: facility expansion is not going well, labor shortages, maintenance of status quo, and so on, but as a result, no smelters are able to increase production. In Japan, the raw materials (battery scrap) can be purchased more cheaply than anywhere else, and bullions can be sold at the international market rate, making it a location where profits can be made without fail.

 

Therefore, it is not surprising that foreign companies, especially Chinese companies, are seeking refining operations in Japan. Korean lead smelters are also reportedly showing renewed interest in refining in Japan.

 

A lead smelter official said, "As Japanese lead smelters in Japan are not able to increase their production, Japan may welcome a new smelter in Japan, even a Chinese one, if it can properly process lead battery scrap.

 

The reason for this is that without the buffer function of the new refinery, there will probably be lead battery scrap that cannot be processed domestically. The argument then becomes, "If it can't be processed domestically, shouldn't we allow the export of battery scrap again? This is an argument that must be avoided by all means, the pundits say.

 

 

(IRUNIVERSE/MIRUcom YT, translated by S. Aoyama)

 

 

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