Car battery sales lift price of lead
A cold winter snap and a biting recessionary chill have forced more and more European car owners to opt for replacement batteries – offering a boost for beaten-down lead prices.
Replacement of vehicle batteries, which account for more than 40 per cent of global lead demand, have helped prices for the metal that fell 60 per cent in 2008, analysts said.
Vehicle breakdown services said there has been a surge in battery demand.
The RAC said its data showed a five per cent increase on its worst day for battery related call-outs.
“We are at red alert at the moment with everybody that can possibly work, out with a vehicle,” said John Clayton, a manager at the RAC.
“The majority are battery-related of course. There are a lot more people hanging onto what [cars] they’ve got.”
Car batteries get a lot more use during the darker winter months, increasing the likelihood of drivers leaving their lights on, as well as additional use of heaters, windscreen wipers and fog lights. The shelf-life for a vehicle battery is between around five to eight years, with the average battery containing between 5-25kg of lead.
“We’ve been really busy here with this cold snap attending over 400 breakdowns each day this week,” said Richard Colburn, one of Green Flag’s rescue operators.
“Lots of them are battery related caused by the extreme cold – in our area it was minus 9 in some parts. We certainly have replaced many batteries in December and January.’’
The lead market has been bombarded by a flurry of negative data from the automotive industry in recent months. That sent lead prices crashing about 70 per cent since a record contract high of $3,890 a tonne in October. 2007.
But since the New Year lead has surged 15 per cent.
“It’s certainly what you would expect to see when consumers are scaling back their spending,” said Gayle Berry, an analyst at Barclays Capital. “We could see lead prices supported at the very least. Unlike for many of the other metals, the gain that we’ve seen in lead is supported by an improvement in the fundamentals.’’
A spokesman for car parts retailer Kwik Fit, said although too early to identify any upward trend in battery sales, things were looking up.
“Battery sales over the past week are substantially up on the same week last year due to the cold snap.”