Auto Lead Battery Demand Accelerated by Hot Summer in Japan

Automotive lead battery shipment is expected to increase in Japan due to hot weather since last week. Seasonal demand had been inactive for automotive repairing batteries in recent summers in Japan because of long rainy season or low temperature. Some of Japanese battery makers are presently in full productions. Another positive factor is slowdown of low-priced battery import from South Korea.

Japanese domestic production of automotive lead battery increased by 40% for January-May 2010 compared with the same period of 2009 when battery sales significantly decreased for new cars after Lehman Brothers’ collapse, according to Ministry of Economy, Trade & Industry. However, the production represented 10-15% lower than the average volume in the same period before 2009. The main reason is that seasonal battery demand maintained inactive since cold winter of 2005-2006.

This summer, one Japanese major battery maker raised the operating rate to 90% of the capacity in June and entered full production recently. Other major battery makers comment their production is currently higher than planned. A lead industry source said the battery demand could be accelerated as long as hot summer continues in Japan.

Meanwhile, Japanese lead battery import from South Korea decreased to 210,000 units (304,000 tonnes) in May 2010 from 352,000 units (536,000 tonnes) in February 2010, according to Ministry of Finance. Price gap between Japanese lead battery and South Korean lead battery also narrowed from previous average 600 yen per unit. In May, the unit price was 3,632 yen for South Korean battery while 3,588 yen for Japanese battery.