The Hindu Business Line : Lead-acid battery makers to raise prices by 10%

Chennai, July 20 If you plan to buy a lead acid battery either for your automotive vehicle or for your power inverter or computer’s UPS next week, you may have to shell 10 per cent more. Forced on the backfoot by rising lead prices, lead-acid battery manufacturers have decided to increase their products’ prices.

“Automotive battery manufacturers have said they will hike the prices by 10 per cent from next week. Only last month, the prices were raised by seven per cent, says Mr P. Varathan of Novo Traders, a dealer in Chennai.

Lead prices on LME rose to a record $3,480 a tonne on Friday. That is a 100 per cent rise since the beginning of the year. The metal’s prices have virtually been on fire this week as an US smelter was shut down. Before that, curb on exports from Australia and Canada due to probes into lead pollution had been driving the market.

Within the country, Hindustan Zinc, the sole producer, raised lead prices by Rs 7,800 a tonne on Friday to Rs 1.42 lakh. Last week, it had raised the prices by Rs 1,100.

Lead consumption in the country is estimated at 2.75 lakh tonnes. Hindustan Zinc has a capacity to produce 85,000 tonnes but it produced only 48,800 tonnes last year. The rest of the demand was met from recycling, which is estimated to be over one lakh tonnes, and imports.

For the lead-acid battery, lead makes up 70 per cent of the raw material costs. Over 130 crore batteries are produced every year in the country for various uses, including for wireless system, hospitals, telephones, signal systems, air traffic control, in the country by the organised sector only.

“If you were driving a Santro, Esteem or a car of that class, you now pay Rs 3,400 for a battery. From next week, well …,” said Mr Varathan.

Industry sources said demand for unbranded batteries could rise, particularly among users of two-wheelers. But Mr Varathan said: “Four-wheeler consumers in particular are buying only branded ones these days.”

no alternative

According to industry sources, there is no alternative for lead in the battery.

The producers would also be looking to tightening their belts, reduce waste during production and improve the manufacturing process. “They may also wait for the prices to stabilise,” the sources said.

One immediate reaction would be that demand for recycling of the metal could rise. “There could be a rush for collecting scrap and used batteries. Lead is a metal that never loses its properties and is easy to smelt. Recycling is the only incentive,” said the sources.

Automotive battery manufacturers pay consumers who bring back used batteries as part of a drive initiated by the Union Environment Ministry to prevent lead pollution, especially by the unorganised sector.

Will that mean consumers will get more for returning used batteries? “No. There is no information on that from the companies,” said Mr Varathan. Currently, consumers get a rebate of Rs 150-200 for returning used battery while buying a new one.