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Chinese Battery producers plan to shut down for Qingming Festival

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SHANGHAI (Scrap Register): Most battery producers plan to shut down for Chinese Qingming Festival after cutting output in early and mid March in off-season.

According to SMM, the most battery producers will take holidays for 2-3 days and some will close for 4-5 days and small amounts will shut down for 7 days. Holidays increased on a yearly basis due to sluggish orders.

Output reduction and closure at battery producers is due largely to poor demand at end-user market in off-season in March-April. In addition, battery producers, predicting prices to drop further, are active in selling goods to reduce inventories.

However, downstream distributors show low purchase interest with risk aversion sentiment. Hence, inventories at battery producers are high and higher than last year’s average level.

Battery inventories at most battery producers can be sold for 25-30 days and those at some battery producers can be sold more than 30 days. Battery inventories are expected to keep rising in March.

In other news, sales at distributors reduced due to off-season. However, distributors have had promotions and reduced purchases, lowering battery inventory. Distributors, expecting price to drop in April, show low purchase interest.

If battery producers enhance battery promotions in April, distributors will replenish stocks at low prices. Besides, battery producers will increase lead purchase for normal production from late April.

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