Increased Volatility in Lead Prices Challenges Profitability of Lead Acid Battery Vendors

Recent fluctuations in lead prices are likely to negatively impact the demand for stationary lead acid (SLA) batteries that have a lead constituent of almost 85 percent. This is likely to affect the profitability of SLA battery vendors since lead acid batteries contribute to the bulk of their industrial battery revenues. Unfortunately, lead prices are expected to continue to increase owing to factors such as an unequal demand-supply equation and the closure of some lead smelting units in developing regions. This places the vendors in the difficult position of having to incur additional costs without being able to pass them on to the customers.

This Frost & Sullivan research is a detailed study of the world SLA battery market. It provides in-depth revenue and growth forecasts with individual analysis of revenues based on the different distribution channels adopted, type of construction, application segments, and geographic regions.

Influx of Data Centers Contributes to Lead Acid Battery Growth

Rising demand for uninterruptible power supply (UPS) devices is expected to positively impact demand for energy storage devices wherein SLA batteries form a major part. Uninterrupted power is becoming increasingly important for the smooth functioning of sensitive computing equipment, networks, and test equipment. In particular, opportunities are expected to arise from the gradual revival of the IT and IT-enabled services industry that depends on critical equipment requiring consistent clean power. Since existing power generating stations are often unable to meet this demand, UPS plays a major role during power outages.

"Increasing automation and dependence on computer networks, infrastructure development, and the rapid growth in the services sector signal a bright future for lead acid batteries, "says the analyst of this research service.

SLA Batteries Remain the Preferred Energy Storage Device for Standby Power Applications

"SLA batteries continue to be favored for standby power applications such as UPS, inverters, and other power conversion devices. This demand is likely to be largely driven by a recovery in the telecommunications industry and the growth in IT and power conversion equipment, new developing markets, and a lack of serious competition to the lead acid chemistry," observes the analyst.

Among all the end user segments that SLA batteries cater to, the telecommunications application segment is the largest, contributing to a little more than 50 percent of the total SLA battery revenues. The replacement market in the telecommunications segment is likely to drive the demand during the initial years of the forecast period. With the growth in computing infrastructure and increasing dependence on automation and internet protocols increasing, the demand for SLA batteries as reliable energy storage devices is likely to boost the overall SLA battery revenues during the latter part of the forecast period.

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Detailed Revenue and Growth Forecasts

This research contains exhaustive revenue and growth forecasts for the world stationary lead acid (SLA) battery market with individual analysis on revenues generated from the different distribution channels adopted and the SLA battery construction type. This enables the client to evaluate the available potential target and market size for SLA batteries. The research also focuses on revenues from different application segments and geographic regions, thereby enabling the client to better understand the market.

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By Construction Type:

• Flooded stationary lead acid battery market
• Sealed stationary lead acid battery market

By Geographic Region:

• North America
• Europe
• Asia Pacific
• Rest-of-World

By End-User Sector:

• Telecommunications application
• Data communication application
• Utility application
• Emergency lighting application
• Security system application
• Cable television/broadcasting application
• Oil & gas exploration application
• Other application

The following technologies are covered in this research:

• Stationary Lead Acid (SLA) Batteries: Lead acid batteries are the earliest form of energy storage solutions that generate electricity from a chemical composition. They are available for a variety of applications in sizes based on the usage requirements. Lead acid batteries consist of two electrodes of opposite polarities and an electrolyte. The spongy lead at the negative electrode and the lead alloy at the positive electrode react with the electrolyte - sulphuric acid - forming lead sulphate. The reaction completes with the discharge of ions at the electrodes. SLA batteries are grouped into two technology categories based on the construction - flooded lead acid and valve-regulated lead acid (VRLA).
• Flooded SLA Batteries: Flooded SLA batteries are the original version in which lead acid batteries were introduced around 140 years ago. These batteries contain two electrodes of opposing polarities and an electrolyte in liquid form. On usage, the level of the liquid reduces and distilled water needs to be added regularly to maintain this level in the battery. Flooded batteries are rugged in nature and not overly sensitive to fluctuations in the charging parameters, though regular maintenance by addition of distilled water or electrolyte is a necessity.
• Valve-regulated Lead Acid (VRLA) Batteries: VRLA batteries were introduced during the early 1970s as a reliable source of standby/backup power in a variety of applications including telecommunications, UPS, and power tools. The construction of VRLA batteries is similar to that of flooded batteries except for the electrolyte being present either in an absorbed condition or in the form of a gel. Further, VRLA cells contain a resealable vent regulating the internal pressure in the battery during instances of overcharging.

Click here to view the analyst presentation:

A714-27 presentation.ppt

Chapter 2

• Total Stationary Lead Acid Battery Market: Market Drivers Ranked in Order of Impact (World), 2004-2010
• Total Stationary Lead Acid Battery Market: Market Restraints Ranked in Order of Impact (World), 2004-2010
• Total Stationary Lead Acid Battery Market: Unit Shipment and Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Percent of Revenues by Distribution Channel (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Original Equipment Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Aftermarket Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Percent of Revenues by Construction Type (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Flooded Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Sealed Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Percent of Revenues by Geographic Region (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Revenue Forecasts (North America), 2000-2010
• Total Stationary Lead Acid Battery Market: Revenue Forecasts (Europe), 2000-2010
• Total Stationary Lead Acid Battery Market: Revenue Forecasts (Asia Pacific), 2000-2010
• Total Stationary Lead Acid Battery Market: Revenue Forecasts (Rest-of-World), 2000-2010
• Total Stationary Lead Acid Battery Market: Competitive Structure (World), 2003
• Total Stationary Lead Acid Battery Market: Company Market Share by Revenues (World), 2003
• Total Stationary Lead Acid Battery Market: Impact of Top industry Challenges (World), 2004-2010

Chapter 3

• Total Stationary Lead Acid Battery Market: Percent of Revenues by End User (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Telecommunications Application End-user Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Data Communication Applications End-user Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Utility Applications End-user Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Emergency Lighting Applications End-user Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Security System Applications End-user Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Cable Television / Broadcasting Applications End-user Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Oil & Gas Exploration Applications End-user Revenue Forecasts (World), 2000-2010
• Total Stationary Lead Acid Battery Market: Other Applications End-user Revenue Forecasts (World), 2000-2010