The market for electric bicycles in China, the world’s biggest consumer and producer of lead, is nearing a peak, according CHR Metals Ltd., a lead and zinc consulting company in Godalming, England.
Two- and three-wheeler e-bikes account for more than half of all lead consumption in China and about 20 percent of global demand, Huw Roberts, a founder of CHR Metals, said at a Metal Bulletin conference in Istanbul today. The nation used 4.63 million metric tons of refined lead last year, or 44 percent of global demand, Standard Bank Plc says. Batteries are the biggest use for the metal.
“In China, the major market is being in the two-wheeler and three-wheeler sectors and I believe we’re beginning to see some plateauing in those markets,” Roberts said. “Recycling becomes a more important factor for lead production in China and it means it doesn’t need as much incremental mine production.”
Refined lead output in China from recycled material exceeded 2.5 million tons last year, more than double the total five years earlier, according to CHR Metals. People in China rode more than 180 million e-bikes by the end of last year, up 36 percent since 2010, according to Wood Mackenzie Ltd. Average lead content in a two-wheel e-bike has dropped from about 13 kilograms (29 pounds) in 2010 to 11 kilograms last year, according to the Edinburgh-based researcher.
“I’m probably more optimistic than I’d been 12 months ago,” Roberts said. “We are now looking for some growth during the course of 2013, with the growth rate probably slightly slower in China and slightly faster outside China.”
Lead for May delivery on the Shanghai Futures Exchange fell 8.5 percent in the past year as stockpiles in warehouses monitored by the bourse climbed almost fourfold. Inventories monitored by the London Metal Exchange dropped 26 percent in the past year to the lowest since Oct. 10.
There is some evidence that lead inventories in Malaysia and Singapore are being moved to the U.S., Roberts said. The U.S. is the second-biggest lead user, according to the International Lead and Zinc Study Group in Lisbon. About 85 percent of all lead goes into lead-acid batteries, according to CHR. Most of lead demand is for replacement goods rather than new equipment, Roberts said.