Price of lead weighs on battery manufacturers

Saturday, March 31, 2007

Over the past few years, the price of lead, which accounts for 65% of the typical wheelchair battery, has rocketed upward to unprecedented heights.
In late February, lead crested $2,000 a metric ton, an all-time high. That's an increase of about $1,500 since early 2004 when lead began its dizzying ascent. Since then, two leading suppliers of wheelchair batteries, MK Battery and Interstate Battery, have raised the price of their products about 15%, say officials at both companies.
"I think we are going to be challenged to not increase again," said David Brunelle, vice president of sales at MK. "We've absorbed a lot of the increase. We understand the pressures the mobility industry is under right now with reimbursement."
For the most part, supply and demand has driven up the cost of lead. A leading factor on both sides of the equation is China. As that country transforms itself "from a bicycle to a motorcycle/car economy", it has developed a ravenous appetite for batteries. Additionally, China is a large producer of lead, and unlike 10 years ago, it must now comply with new environmental regulations. Those regulations benefit the environment, but they also hamper production. There's also little investment being applied to opening new mines, Brunelle said.
"Who wants to invest in a lead mine?" he said. "That's another problem. It's expensive and not a very glamorous business to be in."
Additionally, while manufacturers continue to research new battery technology--such as lithium ion--lead products are still the most economical to produce.
Faced with those challenges, MK and other vendor continue to streamline operations to offset the rising cost of lead--and keep their fingers crossed that prices drop.
"I'd like to think that we can go nowhere but down, but since it is a commodity and there are speculators involved, it is hard to say," said Paul Barnett, a product specialist with Interstate Batteries. "We just have to sit back and watch."