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It’s not all about China? Why everything matters to lead markets, but particularly China
Farid Ahmed
Principal Analyst Lead Markets
128th BCI Convention, San Antonio, TX
1st-3rd May 2016
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China: where it’s come from, where it’s going
China’s environmental crackdowns – the truth
The global picture
Raw materials supply
The global supply-demand balance
Threats and opportunities
The key takeaways
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Agenda
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Global lead consumption
China – where it’s come from, where it’s going
Global lead production
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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China – where it’s come from, where it’s going
Chinese lead consumption by sector
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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China – where it’s come from, where it’s going
New Chinese mobile phone channels per month
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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China – where it’s come from, where it’s going
China’s GDP still the envy of the world
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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Breathe in the air, don’t be afraid to care
China’s environmental crackdowns – the truth
Dirty lead recycling
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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China’s environmental crackdowns – the truth
China’s battery production capacity
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
-25
0
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2012 2013 2014 2015
millio
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Total production Closures
Source: Wood Mackenzie
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China’s environmental crackdowns – the truth
China needs an effective, formalised recycling scheme covering the whole country
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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China’s environmental crackdowns – the truth
Changes in China’s smelting capacity
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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China’s environmental crackdowns – the truth
China’s mine production
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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The global picture
Global lead consumption
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Trusted commercial intelligence www.woodmac.com
13
The global picture
Global lead consumption
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Trusted commercial intelligence www.woodmac.com
14
The global picture
Global lead production – balance between primary & secondary
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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The global picture
Global lead production
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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Raw materials supply
Zinc supply-demand balance
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Supply deficit! 2016: -540kt
2017: -475kt
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Raw materials supply
Production from zinc/lead mines – Rest of World ex-China
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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The global picture
Global lead production
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Trusted commercial intelligence www.woodmac.com
19
Raw materials supply
Global lead production – balance between primary & secondary
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Trusted commercial intelligence www.woodmac.com
20
Raw materials supply
Global lead production – balance between primary & secondary
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Trusted commercial intelligence www.woodmac.com
21
Raw materials supply
Global lead production – balance between primary & secondary
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Trusted commercial intelligence www.woodmac.com
22
Raw materials supply
Lead supply-demand balance
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Supply deficit! 2016: -76kt
2017: -141kt
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China & Rest of World: primary & secondary
The good, the bad and the not so ugly
Lead legislated out of existence in West
Legislation restricting use in China
Alternative battery technologies
Increasing proportion of hybrids and EVs
The future of lead under threat…
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
Start-stop batteries – 25% more lead used
New, cleaner lead production technologies
Increased focus on renewables
Hybrids and EVs still need lead-acid batteries
… but opportunities still beckon
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Future hybrids & EVs will use Li-ion, but inside this cutting-edge EV there is still a lead-acid battery
The good, the bad and the not so ugly
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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Key t
akeaw
ays
China has rapidly become dominant in both production & consumption
Even a slowing Chinese economy will have strong future lead demand growth
China is very serious about improving environmental performance
More consolidation of Chinese lead industry with focus on self-sufficiency
Asian, especially Chinese, demand will be driver for long-term growth
Industry can’t control supply threat from raw materials availability
Threats remain to lead use in the West, but opportunities offer hope
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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Q A &
Q A &
IT’S NOT ALL ABOUT CHINA? WHY EVERYTHING MATTERS TO LEAD MARKETS, BUT PARTICULARLY CHINA
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Disclaimer
This presentation has been prepared by Wood Mackenzie Limited for delivery at for the 128th
Battery Council International Convention, San Antonio, Texas, May 2016. It has not been
prepared for the benefit of any particular attendee and may not be relied upon by any attendee or
other third party. If, notwithstanding the foregoing, this presentation is relied upon by any person,
Wood Mackenzie Limited does not accept, and disclaims, all liability for loss and damage
suffered as a result.
The information contained in these slides may be retained by attendees. However, these slides
and the contents of this presentation may not be disclosed to any other person or published by
any means without Wood Mackenzie Limited's prior written permission.
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