Demand for automotive batteries could soar if forecasts of a north European freeze this winter come true, putting pressure on a stretched supply chain, industry players have said.
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Reuters noted that some European weather forecasters, including the UK’s Met Office, have predicted colder-than-usual temperatures across Europe north of the Alps this winter which could mean a significant rise in demand for replacement car batteries.
UK battery dealers told the news agency that, after a week of frost, battery sales tend to pick up while analysts and other dealers added that the industry may find it hard to meet demand.
Data showed lead consumption levels were steady in Europe, but demand may have been hidden by destocking as the supply chain attempts to manage rising working inventory costs due to strong lead prices, Reuters said.
“When we look at lead consumption this year and last year, demand across Europe has been pretty much flat…and that may be due to destocking,” CHR Metals analyst Huw Roberts said.
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By GlobalData“If that is the case, and if we do have an extended period of cold weather, we could find ourselves working through existing battery stocks very quickly,” Roberts told Reuters.
Battery retailers reportedly confirmed they were carrying low stocks. “Our stores are pretty low at the moment. It’s not just the cost of keeping stock, but it’s also taking longer to get stock from our suppliers,” a vehicle battery seller said.
An official at Swedish metals miner and refiner Boliden, which owns one of the largest secondary lead plants in Europe at Bergsoe in southern Sweden, told Reuters the generally mild autumn had meant fewer batteries needed replacing so far, setting the stage for a sharp rise in demand if temperatures fell sharply.
The managing director of battery producer Yuasa Europe, Marcus Heather, reportedly said European vehicle battery demand was typically around 40 million units per year and added: “We have had some very mild winters, and some non-branded batteries, which may not perform as well as original equipment batteries, could fail in cold weather,” he said.
Reuters said he was unable to predict how much demand would rise this season, but added that Yuasa had significant stocks available for their customers.
“We have seen terrific demand, up literally 100% in the last few days,” he told the news agency.
In addition to low battery stocks, market watchers have also expressed concerned about low primary lead inventories, Reuters noted.
