The surge in demand for traditional lead-acid car batteries and persisting transportation problems have created a shortage that has been felt most acutely in the huge US auto sector and has driven lead prices up worldwide. While other battery metals such as lithium and cobalt are in demand from electric vehicle manufacturers, internal combustion engine batteries account for half of the global demand in the 12 million tonne lead market.
The United States accounts for 13% of global lead demand, but consumption rose towards the end of the COVID-19 quarantine as motorists seek replacements for lead-acid batteries that have failed after extended periods of inactivity. According to analysts and traders, prices also rose last week due to rumors that the lead processing plant announced force majeure, although no such news has been reported since.
“Rumors have raised prices, but so far it doesn’t matter,” said Farid Ahmed, an analyst at Wood Mackenzie. “The demand for replacement batteries in the US was as hot as in Europe.”
On June 30, lead by the standard reached its maximum since July 2018 and amounted to $ 2344 per ton. Wood Mackenzie expects car battery lead demand to rise 5.9% from 2020 to 6.5 million tonnes this year, Ahmed said, returning to pre-pandemic levels.
This spike in demand, coupled with shipping delays, has pushed US lead charges, which are paid based on LME physical market benchmark prices, to an all-time high of $ 375 per tonne.
Strong demand and related shortages have also triggered a decline in stocks in warehouses listed on the London Metal Exchange, the world’s largest exchange of visible lead stocks. This year, these stocks have decreased by more than 40% and amounted to 72,250 tons.