In 2023, for the first time in a long while, we are observing a decline in the prices of starter batteries. This trend can be mainly attributed to two factors: the stability of lead prices on global markets and the relative stability of currency exchange rates, which have not brought major surprises this year. In this article, we will take a closer look at these factors and their impact on the prices of batteries, from the perspective of Poland, where the currency is the Polish złoty (PLN).

Stability of Lead Prices

Lead, being a key component of starter batteries, has its prices mainly shaped by the London Metal Exchange (LME). The LME is the largest non-ferrous metals market in the world, where base prices for metals such as lead are set daily. In 2023, the prices of lead on the LME were relatively stable, which had a direct impact on the production costs of batteries.

The Mechanism of Action of the LME

The London Metal Exchange operates on the principle of an open market, where prices are determined based on supply and demand. The trading of lead takes place in the "ring" system, where brokers trade metals in designated sessions. The price of lead on the LME affects the global prices of this metal, including the raw material costs for battery manufacturers.

Sourcing of Lead: From Mining to Recycling

Lead is primarily obtained from two sources: mining and recycling. Lead mining takes place in mines, from where the raw material is sent to smelters for refinement. The second, increasingly important source of lead, is the recycling of old batteries. This process not only reduces the demand for new raw material but also contributes to environmental protection.

The Role of Currency Exchange Rates

In Poland, where the currency is the złoty, exchange rates play a key role in shaping the prices of imported goods, including batteries. In 2023, exchange rates, such as the US dollar (USD) and the euro (EUR), were relatively stable against the złoty, which contributed to mitigating fluctuations in battery prices on the Polish market. The stability of currency exchange rates facilitates cost and price planning for importers and distributors of batteries in Poland.

Summary

The stability of lead prices on the LME and the relative stability of currency exchange rates in 2023 have contributed to the reduction in the prices of starter batteries. This situation is beneficial for both manufacturers and consumers, allowing for more predictable planning and purchasing. For Poland, where these prices are converted into złotys, the stability of exchange rates is particularly significant, helping to balance potential price fluctuations caused by changes in international markets.

 

Robert Mazurek CEO, mrAkumulator Ltd.

*Table with average lead price - source: AUTOPART SA

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