Four Key Points for Observation in the Accelerated Growth of Lead Acid Battery Industry

Between 2005 and 2010 the production output and export volume of China’s lead acid battery products were kept at an average annual growth rate of 19.9% and 22.8%, and the export growth rate ranked top in the chemical battery sector. China manufactures more than one quarter of lead acid batteries worldwide. Battery accounts for over 70% of the consumption of metal lead, making it the key application sector in the downstream industry of metal lead. With the continual growth in the application in automobile, motorbike, electric car, and 3G telecommunication industry and renewable energy sectors, battery industry is widely believed to have a bright future. Take Shandong province as an example, bidding is organized for lead acid battery exclusively for usage in electric bicycles in the “Electric Bicycle Going to Countryside” move. 21 battery manufacturers and 55 electric bicycle manufacturers were shortlisted as potential candidates. The bid awarding of lead acid battery exclusively for use in electric bicycle shows the acknowledgement of the government toward products from bid winning manufacturers. Bid winning battery factories are compulsorily required to recycle waste battery for electric cars. For the purpose of increasing the usage of lead acid battery exclusively for use in electric bicycle,the bid winning electric bicycle factories must use dedicated bid-winning lead acid battery models, otherwise they cannot claim corresponding government subsidies.

In 2009 China’s total output of lead acid battery was 120 million KVAh, with consumption of metal lead surpassing 2 million tons, and total sales topping 100 billion yuan. In the first half of 2010, China’s battery industry recorded an industrial output value of 184.8 billion yuan.The output of lead acid battery was 67.3618 million KVAh, accounting for about 30% of national battery industrial output value. With an increase of 20.09% compared with the same period last year, its rising margin ranked among top three in the battery industry.

In the first half of 2010, there were about 1500 lead acid battery manufacturers in China. At present the domestic market is divided into three segments represented by start-up type,industrial usage and electric car use batteries.Those manufacturers are concentrated in coastal provinces and municipalities in the east,such as Zhejiang, Jiangsu, Guangdong, Shanghai, Hebei, Hubei and Heilongjiang. More than 25% of the global lead acid battery output is concentrated in China.

However, there are also prominent problems in the battery sector. Firstly, low industry access threshold and loose auditing measures lead to massive low standard and repetitive construction, resulting in small and loosely organized enterprises. Therefore, relevant state authorities recently carried out nationwide coordinated supervision and spot check on sealed lead acid battery for use in electric bicycle, which was notified to local governments and related departments. The quality and technology supervision departments of relevant provinces (municipalities directly under the central government) were instructed to properly handle the unqualified products and manufacturers accord-ing to relevant laws and regulations. The spot check covered 504 batches of sealed lead acid battery products for electric bicycle use from 501 enterprises in 17 provinces and cities nationwide; wherein, 461 batches of products from 458 enterprises were found qualified, and the sampling qualification rate of product batches was 91.5%.

Secondly, lead is not traded on domestic futures market. Upstream enterprises hold the control of lead price, resulting in violent fluctuation in raw material price.

Thirdly, research and development in domestic lead acid battery industry is stunted due to shortsightedness; its R&D ability is yet to be improved. Nevertheless, it will obtain indirect fund support from the government, as the lead acid battery, owing to its close link with the electric car industry, is listed in the “Provisional Method for Fund Management of Pilot Financial Subsidy for Privately Purchased New Energy Cars” promulgated by the state government in June this year. Take the equipment of domestic recycled lead industry as an example, at present the pre-treatment equipment for waste lead acid battery are basically imported from abroad. Therefore, how to intensify efforts in the research of domestic production of waste lead acid battery pre-treatment equipment has become the focus of R&D.

Finally, there is high level of pollution in production and warehousing processes. A small number of lead acid battery factories have poor environmental protection control measures, and some lead acid batter factories have experienced lead poisoning incidents, which increased the environmental protection pressure on enterprises. However, it is recently reported in the market that the lead acid battery industry will enforce environmental protection permit mechanism, which will help establish industry image, strengthen industry integration, build up eco-friendly, green, and low carbon emission enterprises, making it the development direction for recycling non ferrous metal enterprises.Meanwhile, the “Comprehensive Prevention and Treatment Plan for Heavy Metal Pollution(2010～2015)” will soon be unveiled, further speeding up structural adjustment in the heavy metal industry.