Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Lead prices are expected to cool-off once supply shortages are overcome, says Nikunj Aggarwal, Director of Pilot Industries to Davis Index. In FY2021, lead production in India is likely to fall by 15pc. 


How has COVID-19 pandemic impacted the lead recycling market? What challenges are recyclers facing?

COVID-19 has impacted almost every sector including the lead recycling industry. Demand from the automotive, inverter and industrial sector had completely stopped due to the lockdown in India and other countries around the world. Several battery producers announced production cuts, besides our Industry was impacted by working capital tightness and manpower shortage. We saw a sluggish end to the first quarter. However, since this is becoming a new normal, things are opening up at a much faster pace and have seen a fairly decent demand amid supply shortage. This helped push prices higher and support some secondary smelters to increase production despite several constraints. 


Post-lockdown, we faced many challenges to get back on track including manpower shortage. Workers had returned to their hometowns during the lockdown and we overcame this challenge by arranging return transport for them. We have introduced daily check-ups at our factories and adopted proper sanitisation processes at all our facilities. We are hopeful of operating at 75pc capacity by the end of August. 


How much lead is annually recycled by Pilot Industries? How has COVID-19 lockdown affected the production levels of Pilot Industries compared to the prior year?

Annually, Pilot Industries recycled 35,000mt of lead in FY 2019-20, in the current year we are aiming to achieve 90pc of these levels. Due to the pandemic-related lockdown, we have lost Q1 demand, but we still hope to make up for it in the coming months. 



Where do you see secondary lead ingots and battery scrap price in the upcoming quarters?

We see lead prices cooling off once supply shortages are overcome. 



Are there any demand and supply constraints for Pilot Industries? Is the sluggish auto sector hitting the demand for lead extensively? 

As of now, supply is a constraint, due to containment zones many supplier factories are still under operating at low capacity utilisation rates. Surely, a sluggish auto demand was already impacting lead demand since last year. However, demand for replacement batteries is good and intact. So overall, we would say that the demand impact is neutral. 


Is Pilot Industries looking for export markets? What is the price difference between imported scrap rates and domestic rates post lockdown?

Pilot Industries is a regular exporter of recycled lead. We export to more than 8 countries and have good relations with various manufacturers around the world. Currently, domestic scrap prices are higher due to supply shortage. 


What is your outlook for the lead industry in India for FY21?

In FY2021, we expect overall lead production to reduce by 15pc. Hopefully, by fourth quarter things would be back to normal. Demand for new automotive in both commercial and private segment should return and be supported by replacement batteries market. Secondly, with the government’s emphasis on renewable energy, we expect a significant increase in demand for solar batteries.

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