Washington (Platts)--20Nov2012/533 pm EST/2233 GMT

Although some market sources said this week that 38 cents/lb is becoming a more typical purchase price for used lead-acid automotive batteries, it appears that 40 cents is still a prevalent price in the marketplace.

"I've started quoting 38 cents, and it's not an issue as far as buying at that level," a source with a lead smelter said, adding that roughly half of the 50% lead, starter-lighter, ignition batteries that he's buying are priced at 38 cents, picked up, with the other half of the units at about 39-40 cents.

However, the buyer agreed with other market sources that the price trend is still downward. "The batteries that I bought for 40 cents were batteries that I bought last week and haven't picked up yet," he said. Also, amid what the source called "fantastic" used battery supply, he added, "I think if everybody wasn't so scared [of not finding a market at lower price levels] prices would already be lower. People are timid about cutting the price too quickly."

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Another lead smelter source said that his company is still paying 40 cents, picked up for the scrap units. "We're pushing for lower, but we're still paying 40 cents for some," he said. If his company offers 38 cents, he said, "[deals] slow down a little bit," while transaction are at 40 cents "if you really want the batteries."

Another buyer agreed with the 38-40 cent price range but said he is still paying 40-41 cents for the "majority" of the lead scrap he buys.

Still, another smelter source said he was now regularly paying 38 cents -- and even 37 cents in some cases -- for used lead batteries.

"I'm not sure who's paying 40 cents anymore," he said, "People tell us we're competitive with everybody." The source said he would more fully test the 37-cent level following the Thanksgiving holiday weekend. "We're on track to do that," he said. "We'll see how it goes with weather," referring to the fact that colder temperatures cause automotive batteries to expire more quickly, freeing up more supply.

But cold temperatures or no, the the source estimated that the recent closure of lead smelter Exide's Frisco plant in Texas has resulted in roughly 24 million/month of used batteries "that have to go somewhere else," and estimated that Exide's planned closure of its Reading, Pennsylvania, plant would make an additional 26 million/month of used batteries available.

The source said he believes Exide would close the Reading site before the company's stated March closure date. Exide offices were not immediately available for comment on the closure timeline. Platts price assessment for 50% lead, starter-lighter, ignition batteries was unchanged this week at 38-40 cents/lb, picked up.

--Laura Gilcrest, laura_gilcrest@platts.com

--Edited by Richard Rubin, richard_rubin@platts.com

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