Lead Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The lead market is projected to register a CAGR of over 5% during the forecast period (2021-2026).

The market was negatively impacted by COVID-19 in 2020. Considering the pandemic scenario, the construction activities were stopped temporarily during the lockdown to curb the spread of new COVID-19 cases, thereby decreasing the demand for lead-based products such as lead sheets, lead-clad steel, and others from the construction industry. For instance, according to Eurostat, construction decreased by 28.4% in the Euro area (EU-19) countries and by 24% in the European Union (EU-27) countries. Furthermore, the demand for lead-acid batteries decreased due to the temporary pause of the automotive manufacturing units during the lockdown. However, the demand for lead-acid batteries, especially valve-regulated lead-acid (VRLA) batteries, from the electronics and telecommunication industry increased during this period, as people opted to work online from their residence, which enhanced the demand in the market studied.

Over the short term, the growing demand for lead-acid batteries globally is expected to drive the market growth.

On the flip side, the environmental regulations imposed by various countries on the usage of lead due to its toxicity and the availability of substitutes are expected to hinder the growth of the market.

Asia-Pacific is expected to dominate the global lead consumption, with the majority of the demand coming from China, South Korea, Japan, and ASEAN countries.

Key Market Trends

The Battery Segment is Expected to Dominate the Market

Lead-acid batteries are used in the form of starting, lighting, and ignition (SLI) batteries, stationary batteries (telecom, UPS, energy storage systems (ESS), etc.), portable batteries (consumer electronics, etc.), and more.

SLI batteries have major applications and are designed for automobiles and are therefore always installed with the vehicle’s charging system, which means that there is a continuous cycle of charge and discharge in the battery whenever the vehicle is in use.

The major factor attributing to the growth of the SLI battery market is the increasing demand for these batteries to power start motor, lights, and ignition systems or other internal combustion engines with high performance, long life, and cost-efficiency.

The lead-acid battery is the technology of choice for all SLI battery applications in conventional combustion engine vehicles, such as cars and trucks.

According to OICA, around 77.62 million vehicles were produced globally in 2020 compared to 92.18 million vehicles produced in 2019, witnessing a decreasing growth rate of about 15.8%, thus decreasing the demand for batteries installed in vehicles and negatively impacting the demand in the market studied.

Although the market for conventional combustion engines is expected to decline over the next 30-40 years, replacement car technologies are expected to continue to use SLI-type lead-acid batteries to provide power for a range of electronics and safety features within the vehicle. This is expected to enhance the demand for batteries during the forecast period.

Valve-regulated lead-acid (VRLA) battery finds its application in off-grid power systems, telecom tower backup systems, solar/photovoltaic systems, computer UPS, and others.

According to the Japan Electronics and Information Technology Industries Association (JEITA), the global electronics and IT industry’s production was valued at USD 2,972.7 billion in 2020, and it is estimated to reach USD 3,175.6 billion by 2021, with a growth rate of 7% year-on-year, thus increasing the demand for batteries used in different electrical and electronics applications.

Therefore, the aforementioned factors are expected to significantly impact the lead market in the coming years.

The Asia-Pacific Region is Expected to Dominate the Market

Asia-Pacific is expected to dominate the lead market, with the majority of the demand coming from China, Japan, and India.

Lead-acid batteries are used in electric vehicles (EVs), mainly commercial EVs, to supplement other ancillary loads. China is currently the largest market for electric vehicles. In April 2020, the Ministry of Finance of the People’s Republic of China issued a notice on ways to promote financial subsidies for new electric vehicles. It stated that new EVs purchased between January 1, 2021, and December 31, 2022, would be exempted from vehicle purchase tax.

According to OICA, around 25.23 million vehicles were produced in China during 2020 compared to 25.75 million vehicles produced in 2019, witnessing a decreasing growth rate of about 2%, thereby decreasing the demand for batteries from the automotive segment.

In India, the increasing number of solar power projects and the continuous expansion of telecommunication infrastructure are expected to drive the demand for lead-acid batteries in the country, which may increase the demand in the lead market during the forecast period. However, the recent decline in the automotive industry may hinder the market in the country.

According to OICA, around 3.39 million vehicles were produced in India during 2020 compared to 4.52 million vehicles produced in 2019, witnessing a decline rate of about 25%, indicating a decreased demand for batteries used in vehicles.

Furthermore, lead sheets are being used in the building and construction industry for roofing, cladding, and for flashing or weathering to prevent water penetration. High-density lead sheets are being used for acoustic insulation purposes inside the building. Some of the other key applications of lead-based products include cornices, gutters, parapets, electrical conduits, and others.

In 2020, the Chinese construction industry was valued at about USD 1,049.2 billion, and it is estimated to reach about USD 1,117.4 billion by 2021, with a growth rate of about 6.5%, which is expected to enhance the demand for various lead-based products from the construction industry.

Therefore, the aforementioned factors are expected to have a significant impact on the lead market in the region in the coming years.

Competitive Landscape

The lead market is partially fragmented in nature, with no major player having a clear dominance over the market. Some of the key players in the market include Glencore, Korea Zinc, Teck Resources Limited, Canada Metal North America Ltd, and Gravita Metals, among others.

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