Column: Collapsing auto sector a body blow for industrial metals – by Andy Home – Reuters U.K. – March 27, 2020)

LONDON (Reuters) – France’s Recylex has just announced the temporary closure of both its German lead smelter and two battery-recycling plants, one in Germany and one in France.

The decision is due to a “strong drop in demand, especially in the automotive sector, in a context of sharply lower metal prices,” the company said. It will surely not be the last lead producer to mothball its production facilities.

Lead is umbilically tied to the automotive sector. Lead-acid batteries account for around 80% of global usage of the metal. And carmakers just about everywhere have halted their own production lines due to the spread of the coronavirus and the lockdowns on activity that have followed in its wake.

Virtually every industrial metal gets used in one form of another in making planes, trains and automobiles. Particularly the latter. Collapsing automotive production and sales are generating a demand shock that is travelling up the value chain through parts suppliers to metals fabricators and on to metal producers such as Recylex.

Lead’s dependence on carmaking activity is the highest of any metal because the metal’s toxic legacy has seen it engineered out of other consumer products. The lead-acid battery, however, remains the power source of choice for internal combustion engines. Even most electric vehicles use one for starting, lighting and ignition functions.

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