Speculation in commodities and growing demand for batteries drives lead prices to record levels

We haven’t seen a lead price as high as at this moment since 2008. An exceptional rise in lead prices last September makes it that the price of lead-acid batteries will increase in 2017. The question is: why?

There’s no clear answer to that question really. The 'Global Economy' as we know it, contributes to rapid developments. One of the causes is the speculation in commodities. The interest rate is incredibly low, it is difficult to get good yields from the various financial products. The artificial creation of scarcity of raw materials, is a means to achieve higher returns. Just like it happened in 2007 and 2008.

Also, there is an increased demand for lead-acid batteries. Main examples are the applications in telecommunications, solar energy and of course the automotive industry. In Asia, car sales still rise and that stimulates a growing need of (start-stop) batteries.

Another cause is 'sentiment'. Brexit in Europe, Donald Trump elected as US president and a changing economy in China; from production-oriented to more service-oriented. All factors that help bring uncertainty in this matter.

The result: rising commodity prices pushing up prices of lead-acid batteries. You can expect an increase of 10% to 30% or more in 2017. For all parties involved, it's a challenge to manage this. 

This article was written by Paul van der Meer,
Managing Director of Wetac Motive Power -
an import and export company in cyclic batteries
for various types of electric vehicles/applications.