Japan Battery Makers Seek Hike under Slow Demand

Price hike became effective in February for automotive lead batteries announced by Japanese major battery makers recently. Lead price stays extremely high at London Metal Exchange. The makers seem better to pass lead cost up on their selling prices by spring when battery production becomes busier. However, lead battery demand is declining due to warm winter in Japan and the makers are facing difficulties in the hike.Japanese major battery makers carried out previous hike in April 2006 for repairing batteries, the prices of which do not fluctuate automatically along the lead price. Shin-Kobe Electric Machinery and GS Yuasa Corporation raised their selling prices by 10-15% while Panasonic Storage Battery by 15-20% in April 2006. They succeeded in the hike thanks to active demand and supply tightness for repairing batteries in severe winter.The battery makers offer the hike by average 20% in this season despite inactive demand. Battery output volume is currently decreasing by more than 10% among the makers compared with usual years, though which increased by more than 10% last year. Battery inventory seems surplus at both makers and distributors.LME lead price jumped up to US$ 1,809 per tonne in December 2006 and stays at around US$ 1,700 even though copper and zinc prices turned to down. Lead price is higher by more than 40% from April 2006 when Japanese battery makers announced previous price hike. Their profitability would become worse again if the makers cannot achieve the hike.