Analysis on the development trend of China's lead-acid battery industry in 2018

Lead-acid battery segmentation market is fiercely competitive, and scale advantage is the key. The domestic lead-acid battery market is relatively concentrated. The chemical-powered lead-acid battery production industry is highly competitive. The comparison of product prices and the increase in cost have greatly reduced the net profit margin of major manufacturers in the industry. As residents' demands for battery performance continue to rise, the country's increasing emphasis on environmental protection and the rising barriers to entry in the industry, companies with economies of scale in the industry will gain more development opportunities and can be further expanded through expansion and mergers and acquisitions. Scale, industry concentration will be improved.

Upstream high-end battery manufacturers have stronger bargaining power. The lead-acid battery industry upstream includes lead, sulfuric acid, plastics, etc. The lead-acid battery industry has a large demand for raw materials, and the lead and sulfuric acid industries as a whole have overcapacity, and battery manufacturing is an important downstream application area for lead, thus lead-acid battery industry. It has strong bargaining power for lead and sulfuric acid. While the plastics are in short supply, the battery industry has higher requirements for the characteristics of plastics, which makes the bargaining power of the plastics industry lower. The upstream of lead-acid batteries is mainly raw materials and other industries, which are greatly affected by price fluctuations.

Upstream raw materials are affected by environmental protection policies, and price fluctuations are large, which has a significant impact on the cost of the battery industry. The upstream of traders is the lead smelting industry. Since lead and lead-calcium alloys account for most of the cost of lead-acid batteries, the lead smelting industry has a greater impact on enterprises. At present, the number of domestic lead smelting enterprises is large and the competition is fierce. With the increase of domestic environmental protection pressure and the improvement of product quality requirements, the survival space of small and medium-sized smelting enterprises with backward technology will be further reduced, and mergers and acquisitions will further increase the concentration of lead smelting industry. In order to reduce the impact of raw material price fluctuations on the profitability of the industry, companies generally establish a mechanism for linking lead prices with customers on product sales prices.

Downstream demand has driven industrial upgrading, the lead-acid battery industry barriers have emerged, and high-end batteries have strong bargaining power. In recent years, China's lead-acid battery industry has been driven by downstream demand, with good profitability and high-profit margins, which has strong appeal to potential entrants. At the same time, the state has introduced a series of related policies to regulate the industry, which has increased the barriers to entry and industry barriers. The downstream industries are mainly automobiles, electric vehicles, communications, new energy, etc. Currently, the bargaining power of the lead-acid battery industry is generally low, but the bargaining power of high-end lead-acid battery products is relatively high.

Car start-stop battery has a high gross margin and high technical barriers. Due to the more frequent start-up and the requirement for powering the vehicle-mounted electrical appliances during idling, the start-stop battery has higher requirements than the ordinary start-up battery. The penetration rate of the start-stop battery in 2018 will reach 50%, about 13.5 million sets. In 2020, the penetration rate will reach 70%, the shipment volume will be more than 21 million sets, and the production value will be 140 yuan. From 2015 to 2018, it will be the golden growth period of China's automobile start-stop battery, with a compound annual growth rate of 46%.

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