Global Trends in the Lead Market. Bruce L. Murray Vice President of Sales RSR Corporation

Transcription

1 Global Trends in the Lead Market Bruce L. Murray Vice President of Sales RSR Corporation

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3 Outline Lead market developments Environmental regulation: Threats and Opportunity Market: Threats and Opportunity Steps forward 3

4 2014 Consumption by Region 11.0 million MT China 45% Europe 15% Americas 20% Other Asia 19% Other 1% Total Asia: 63% CRU,

5 Stalling demand growth Longer lasting batteries Mature e-bike industry 12% 10% Consumption Growth Slowing economic growth Global China 8% 6% 4% 2% World China Americas Europe 0% -2% % Source: CRU,

6 Net lead usage in Chinese e-bike sector slowing to a trickle 250 Lead usage in electric bicycles, year-on-year change, China ( 000 tonnes) Replacement OE Net change Data: NBS, CRU.

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10 Industry stocks seem set to stay comfortable until finally slipping below critical level in Refined lead stocks, world (weeks consumption, year-end) Surplus Squeeze Note: critical stock-to-consumption level of 2 weeks, above which industry stocks deemed to be in excess of market needs (shown in blue), and below which deemed to be falling short of market needs (shown in red) Data: ILZSG, LME, SHFE, CRU.

11 Changing primary lead supply channels Million Metric Tons China is the largest producer >1 million tons concentrates. imported in 2014 Cost and environmental uncertainty Refined Lead Production Western Hemisphere Large and rapid decline Korea growth to replace closed capacity China ROW Primary Secondary CRU, CNIA, China Customs 11

12 Recycled portion of lead production likely higher than reported Primary 32% Recycled 55% Recycled Primary 13% blending scrap into primary feed CRU, CHR, RSR 12

13 $/Lb. $2.00 LME Lead Price $1.80 $1.60 Volatility $1.40 $1.20 Less volatility $1.00 $0.80 $0.60 $0.40 $0.20 $

14 Strategic Issues of the lead industry Threats Opportunities Lead industry and its products driven out of Europe and ultimately elsewhere due to policies aimed at eliminating hazardous substances Shift stakeholder thinking on lead and lead batteries from being part of the problem (environmentally) to being part of the Solution Increasing performance and reduced cost of lithium-ion batteries and other energy storage technologies Unlock the technical potential for lead batteries to be the future technology of choice in automotive and energy storage applications Perception that lead represents old technology with little relevance to the modern world Communicating recent innovations and the potential of lead-based products to meet future market needs ILA. April,

15 Million Metric Tons Imports replacing closed domestic production in the U.S U.S. Refined Lead Supply Primary Secondary Total Domestic Net Imports Change 15

16 Scrap is exported to less regulated regions for recycling Thousand Short Tons US Lead Scrap Exports US Lead Imports NAFTA Non-NAFTA Thousand Metric Tons (Pb Content) Other Lead Scrap Lead derived from batteries Industrial Batteries SLI Batteries * Excludes substantial quantities Source: U.S. Customs of unreported exports 16

17 17 Mexico dominates the US export market US ULAB exports by country Census Data 2013 Canada 7% Spain 1% Rest of World 0% EPA Annual Reports 2013 Korea 11% Canada 12% Mexico 92% Volume ( 000 MT) Census EPA Mexico 77% Total Mexico Canada Korea Other Source: US Census HT Codes 540 and 580 Source: USEPA GENERAL TRENDS CYAN ENVIRONMENTAL GROUP, LLC

18 >20% of U.S. junk batteries are exported Threat to domestic capacity and jobs Export to avoid higher HSE costs Impact to margins and pricing CRU,

19 Our industry must demonstrate leadership and transparency to earn society s trust Proactive, self-directed industries Natural gas Fertilizer Oil Exploration Reactive, combative industries resisting regulation Tobacco Asbestos Coal Lead and Lead-Acid Batteries Where do we want to be? Collectively strive for excellence Discourage scrap exports to less regulated regions Encourage adoption of best practice and regulation everywhere

20 Much US funding has gone to lithium, but lead-acid hasn t been totally ignored. Data for Fiscal Years Agency No. of Initiatives Funding Obligations DOE 11 $851,994,808 DOD ,274,229 NASA 8 20,811,374 NSF 4 8,582,868 EPA 1 3,258,029 NIST 1 1,375,000 Total 39 $1,316,296,308 Mainly Science (Lithium) Technology No. of initiatives Lithium-ion batteries 28 Metal-air batteries 19 Capacitors 17 Lithium-metal batteries 16 Basic energy storage research 14 Advanced lead-acid batteries 11 Redox flow batteries 9 Sodium batteries 9 CAES 4 Flywheels 4 Others Total US GAO: Batteries and Energy Storage, August, 2012, GAO Mainly demo and testing projects Now: Next: ALABC setting up new advanced lead-acid testing programs with US DOE A new lead-acid basic material science program with DOE is in the early stages of development. 20

21 Lead-acid is competing in dynamic mobile and stationary markets and doing rather well. Can lead-acid hold its own in a transportation market looking for the right combination of clean, affordable technologies? Recent developments suggest the answer is yes. Why did General Motors drop lithium- ion from the Chevrolet Malibu in favor of AGM? Why did Ford choose AGM for its new stop-start F-150? Answer: Simple economics John Howes, Redland Energy Group 21

22 Better products to compete with other battery chemistries Top priorities of ALABC 1950s VRLA Batteries Improved dynamic charge acceptance (DCA) at Partial State of Charge (PSoC) Higher charge efficiency Reduce gassing and water loss Reduce positive grid corrosion 1960s Gel Batteries 1980s AGM Batteries 2000s Lead-Carbon Batteries Future The next lead-acid innovation Please support the ALABC 22

23 Low-impurity recycled pure lead for advanced battery applications: SuperSoft Ultra Gassing Rate / (ml/h) Developed prior to closure of US Primary smelter Joint effort by NorthStar / RSR Technologies Purpose: Supply security Results: Equivalent or better performance Doe Run Gassing Test Data SuperSoft-Ultra Principles established by ALABC Lead purity is irrelevant (99.97 vs %) Minimization of critical elements Influence of residual elements on oxygen- and hydrogen-gassing rates of lead-acid batteries: L. T. Lam, et. al., J Pwr Sources 195 (2010) Days of testing Highly Refined SuperSoft-Ultra Recycled Lead for Critical Applications: Prengaman, et. Al. 15 th Asian Battery Conference (2013) 23

24 We have a unique and attractive story! Lead s attributes compare very favorably to lithium and other chemistries Technical improvements are closing the gap on important performance factors The BCI, ILA and ABR should communicate the competitive attributes of lead-acid vs. other technologies 24

25 Conclusion If our industry is going to deal with threats like the European mandate, we need to design and execute a strong defense and a strong offense. Defense Protect stakeholders with best EHS practice Eliminate lead s environmental footprint in production, recycling and use Avoid hazardous waste exports to less regulated nations. Support the adoption of USA best practice Offense Demonstrate lead s competitive attributes Recycling solution outperforms other technologies Technical advancements closing the performance gap Attractive cost profile 25