Worldwide UPS Battery shortage looms
With China closing many of its UPS battery factories, prices are set to increase by 25%, and lead times stretched by as much as seven months. So if you want to ensure your standby power UPS (Uninterruptible Power Supply) system continues to protect your organisation, now is the time to check your UPS batteries and act fast if they need replacing.
The scale of the problem
China manufacturers a third of the world's lead-acid batteries. But since March, more than 70% of its 2,000 lead-acid battery factories have been shut by the Chinese Government for environmental and safety reasons. Under current manufacturing conditions, 32% of the lead used in the manufacturing process is allowed to be lost to the environment. This is in stark contrast to the US, where the figure is less than 1%. It should therefore be no surprise that UPS battery production is having a negative effect on the environment, and the people living close to the factories. According to state media, over 4,000 people have suffered from lead poisoning since 2009. Most recently, over 300 people, including 99 children, were found to be poisoned by one factory in Zhejiang. Since the scandal came to light, this province alone has witnessed 250 factory closures and lost 90% of its battery production.
The state of the market
According to Wang Jingzhong, vice director of the China Battery Industry Association, the Chinese battery industry has grown by 20% each year for the last six years. And Hu Yongda, an analyst at Antaike, forecast 2011 consumption at 4.19 million tonnes; up from 3.7 million tonnes the previous year. However, by June, three months after the first factory closure, Barclays reported that lead inventories had dropped by nearly 4% and that in the second half of 2011, factory closures will push the global lead market into an 82,000mt deficit. Furthermore, MF Global analyst, Edward Meir, believes that lead prices will hit $3,000 per tonne in 2012. The factories in China will remain shut until manufacturing conditions improve and Government representatives can fully assess each factory. Zeng Jian-jun, vice general secretary of the China Lead-Acid Battery Association, predicts that within three months, China's battery factories will be reduced to 400 sites. And this could theoretically result in 75% less battery production.
Time to act
From speaking to some of our suppliers, they expect UK battery prices to increase by 25%. Furthermore, they expect longer lead times up to four months for smaller batteries, and seven months for larger ones. Our advice is to perform a health check on your UPS batteries now to ensure they are in good working order. Performing a check on your UPS batteries will identify any potential problems and leave you time to replace your batteries before worldwide stocks are really squeezed. To find out more about battery health checks, or to book an appointment, please contact us or call 01488 680 500.