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

Lead batteries need to run to keep fit or they get discharged. The extended lockdowns might have cut down the lives of many a batteries and could lead to increased scrap generation and also boost new battery sales post lockdown. This is a new scenario and many factors such as climate, age of the batteries do play a role in battery life. Many industry participants do believe that new-age batteries can jump-start in case of a long break. 


In India lockdown has halted most economic activities cutting down the use of vehicles. As transportation was restricted, private cars, commercial vehicles and public transport vehicle all have been idled since March 24. The unprecedented lockdown has given rise to new situations and scenarios leading to various questions including the ones about batteries and the lead scrap market. 


It is believed that some vehicular lead batteries may have discharged due to lockdown and several analyst reports suggest that battery makers could expect a rise in demand post lockdown. For battery makers, there could be a quick recovery in aftermarket demand. Even with India’s auto sales down by about 30-35pc, battery makers are in a sweet spot because of sales from replacement markets. 


Bloom or doom for lead scrap

Secondary lead producers are expected to hugely benefit from an uptick in new battery sales. Battery makers would refill their inventories spurring demand for secondary lead ingots, which in turn may support lead scrap prices. Contraction of demand from automakers will be offset by aftermarket sales as battery discharge is inevitable and demand will recover, according to battery manufacturers. Other the other hand, increased battery scrap availability can push scrap prices downwards post-lockdown in the absence of demand.


Pre-lockdown, battery scrap was around Rs83,000-84,000/mt del Delhi and Mumbai. The collection and processing of battery scrap were halted during the lockdown.


Leading recyclers opined that new-age batteries can be brought back to life with a jump-start but old lead batteries could get discharged under no-use. Car batteries could die during the lockdown and would not run on mechanical ignition. If battery maintenance was poor, car owners would be forced to dump the old and buy new ones.


Technically battery discharge is slow in high temperatures and lockdown across India begun at the dawn of summer. This rules out a significant rise in battery scrap post-lockdown.

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