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Batteries/Markets 051102
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Total Battery Market in the U.S. to Reach $14.8 Billion by 2009

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 The China Industrial Association of Power Sources reports that 28 billion units of batteries were produced in mainland China in 2004.  According to China Customs’ statistics, mainland China’s battery production volume currently represents at least 25 percent of the global supply.  Research and Markets discusses information gathered  from 151 Chinese battery makers  in its report, “Batteries in China and Taiwan.” Some of the findings in  the report include:
Alkaline  batteries -  Mainland China is the world’s largest Alkaline battery supplier, with output of primary cells reaching 22 billion units in 2004.  Production is expected to increase by 10 percent in 2005.
Nickel-metal hydride batteries - Some 800 million units of Nickel-metal hydride  batteries were manufactured in mainland China in 2004.  The regions’ Nickel-metal hydride battery output accounted for 40 percent of the global supply in 2004. During that same year, the value of the exports totaled 675 million units, valued at $442 million.  Approximately 60 new entrants planned to include Nickel-metal hydride batteries in their product lines in 2005.  
Sealed Lead-acid batteries  - About 30 percent of the world’s  requirement for sealed Lead-acid batteries is supplied by mainland China.  Sealed Lead-acid battery shipments totaled about 107 million units in 2004.   This was a 25 percent increase from 2003.  In 2005 and 2006, electric vehicles, UPS (Uninterruptible Power Supplies), emergency lighting, security systems and industrial applications will drive demand for these batteries.
Nickel-cadmium batteries -   Mainland China’s production volume of these batteries hit one  billion units in 2005.  Nickel-cadmium battery production in mainland China is set to grow by 5 to 10 percent in the next five years.  Exports reached 826 million units and were valued at $411 million  in 2004.  

Additional information on this report can be obtained on the web at http://www.researchandmarkets.com/reports/306193
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Microsoft Excel Chart US demand for battery and fuel cell materials is projected to increase 5.9 percent annually through 2009 to $3.4 billion.  Healthy gains in US battery production, due to the growing popularity of high-drain electronic products such as digital cameras and wireless phones, will results in the increased use of high-value materials needed to boost battery performance.  Recycling will continue to be a key focus, especially for Lead-acid batteries, which satisfied over 80 percent of its lead metal requirements with recycled material in 2004.  The smaller fuel cell market will show sevenfold gains in output, resulting in extremely rapid advances in materials consumption.

The strongest increases in demand will be seen in carbon/graphite and polymers, although these comprised less than ten percent of the overall battery and fuel cell materials market in 2004.  Carbon/graphite will benefit from rising output of fuel cells, in which these materials are used as plate and electrode materials.  Additionally, there is significant potential for carbon/graphite nanomaterials as product development and fabrication techniques improve.  By 2020, nanomaterials for batteries and fuel cells is expected to be a nearly $1 billion industry.  Demand growth for polymers, especially fluoropolymers, will be driven by fuel cell advances as well as increased production of  Lithium and Zinc-air batteries.

Growth in demand for metals and chemicals will be slower, as the bulk of these materials are tied to mature markets such as Lead-acid and Alkaline batteries.  Although metals were the fast growing material type from 1999 to 2004, much of this was due to a spike in metal prices during this period,  and advances are expected to slow through 2009 as raw material prices moderate.  Smaller-volume metals such as platinum, lithium and nickel, as well as lithium and nickel  chemicals, are expected to advance more quickly, as production of fuel cells and advanced batteries continues to rise.  

Electrodes, by far the largest functional category for materials, are the focus of intense research and development activity aimed at reducing material costs and improving product performance.  However, stronger increases will be registered in the battery market by materials used in electrolytes, separators and other functions such as performance additives, as battery producers increasingly use higher-value materials in these components to enhance performance and extend battery life.

(Information is from “Battery & Fuel Cell Materials” by The Freedonia Group, Inc., 09/2005.  The entire report is available for $4,1000.  See www.freedoniagroup.com.) +
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Microsoft Excel ChartDominating  the  batteries  and rechargers market were the Alklaines with a 54.3% share,  generating  over US$1.5 billion in 2003.  With larger energy density, Alkaline batteries will remain the dominant sector, accounting for close to US$2 billion , or 53.7% of the total market value in 2008. Data is based on information from a consumer market research firm, Euromonitor International. +
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Microsoft Excel Chart The country having the largest percentage growth rate from the year 1998 to 2008 is China, but gains are anticipated worldwide.

Sales of secondary batteries will outpace the demand for primary cells, and among secondary batteries, non Lead-acid types will outperform  Lead-acid batteries through 2008.  Growth in the use of energy-hungry electronic products will drive demand for Lithium-ion, Lithium polymer and Nickel-metal hydride batteries.  Demand for primary batteries will also climb at a faster pace than during the 1998-2003 period, with the product shift going from Zinc-carbon and Zinc-chloride to Alkaline types.

Lead-acid batteries will continue to be the most popular chemistry in value terms, accounting for roughly one-third of all primary and secondary battery demand in 2008.  

Consumer-related battery sales will outpace other market segments, spurred by strong increases in demand for products used to power high--drain portable electronic devices, particularly in more affluent developed countries.   (Information is from “World Batteries” by Freedonia Group, Inc. The cost of the study is $5,400.  See more information at www.freedoniagroup.com) +
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Microsoft Excel Chart Data for graph is from Frost & Sullivan. See www.powersupplies.frost.com +
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Microsoft Excel Chart Although primary AA size batteries still hold a big lead; sales of the disposables fell 8.21 percent last year while AA rechargeables, mainly Nickel-metal hydride, gained a healthy 20 percent.   (Data based on information from A.C. Neilson. ) +
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(Febuary2004)Portable Products at CES Point to Greater Battery Needs
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 (Oct. 2003) China Claims Dominant Share of World’s Primary Battery Market.

According to the China Industrial Association of Power Sources, mainland China is acknowledged as the leading producer to primary batteries with an annual output of 19 billion units.  There are 2,000 manufacturers with 300 of those manufacturers exporting to other countries.
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Alkalines were the top batteries to be exported, accounting for 52 percent of the total.  Although China is currently not the leading producer of rechargeable batteries, they are working to increase their manufacturing to surpass Japan and Korea.  This past year, 2002, their exports of Nickel-cadmium and Nickel-metal hydride batteries totaled US$1.2 billion.

(Information is from “Batteries: Supplier Capability in China,” by Global Sources, Ltd., October 2003. See Web Site:  http://www.globalsources.com)
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 (Oct. 2003) Global market for secondary batteries could almost double in this decade.
Microsoft Excel Chart

 The above figures are based on projections by the Korean Ministry of Commerce, Industry and Energy.

Korea’s goals are to catch up with Japan in the next few years, and the country has a vision to  take the global market lead by 2010. Currently, Japan controls about 70 percent of the world’s production of the rechargeable compact batteries for IT mobile communication units.  

Last year (2002), Korea’s share of the global market was 15.8 percent.  Korea’s proportion of world production is forecast to  reach 20 percent this year and 30 percent  by 2005.  (Information is based on figures from the Korea Ministry and the Battery R&D Association of Korea.)  

The “Big Three” manufacturers, Samsung SDI, LG Chem and SKC are making sizeable investments to produce more rechargeables.  

Already Samsung SDI is the  third largest global manufacturer, following  Sony and Sanyo of Japan.  Samsung plans to raise production capacity to 18 million per month  by the close of 2003 and to 25 million cells by 2005.   Currently, Sanyo reports that their output is 36 million cells per month.

SKC recently announced that is will sell Lithium-ion polymer batteries to the U.S. Department of Defense, having earned quality certification in June.  SKI is also receiving US$1.1 million for development of the next-generation high-polymer batteries from the U.S. Defense department.   

LG Chem is projecting  to increase its investment in rechargeable and has a goal of producing  18-million-cells permonth  by the end of October.

(Data in chart is from the Korean government’s report on the  designated next-generation industries that are to propel Korea’s growth in the next decade.  Such data was noted  in “Rechargeable batteries to boost Korea’s growth” by Kim Mi-hui, Korean Herald, 10/23/03
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Microsoft Excel ChartU.S. demand for primary and secondary batteries is forecast to climb 5 percent annually through 2007 to $14 billion.  An ongoing shift in the product mix toward more expensive batteries that offer improved performance, including high-rate primary Alkaline and lithium types, will also support dollar gains.

Secondary battery demand is expected to outpace primary battery market gains through 2007, benefiting from strong growth in the use of high-drain portable electronic devices.  Lead-acid will account for over half of the demand for all rechargeables in 2007, although Lithium-ion, Lithium polymer, and Nickel-metal hydride batteries will record the strongest growth .

Consumer applications will continue to account for close to three-quarters of all primary battery sales in 2007.  Primary Lithium, Zinc-air and other advanced chemistries are expected to account for an increasingly larger share of total sales because of their superior energy density and longevity.   However, Alkaline batteries will remain the dominant type, accounting for more than two-thirds of all primary battery sales in 2007.

(Information is from “Batteries,” published 06/2003 by   The Freedonia Group.  For further details contact Corinne Gangloff by phone at 44-684-9600 or email [email protected]  The cost of the full report is $4,000.)
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Sprint PCS Rolls Out 3G. Should Investors Care?

While the industry hopes that the Sprint introduction of 3G, behind Verizon and AT&T will be a shot in the arm for cellular, analysts from Lehman Brothers don’t see the business generating free cash flow because of its $16 billion debt. Pricing of the service works out to about $1.50 per megabyte. (Ed note: Using Sprint 3G would make one hi-res download of BD’s next issue cost about $10.00.) Contrarily, USB Warburg thinks the $4/share Sprint can have growth to $17/share. (09-02BD78-15)

Barron’s Technology Week
August 9, 2002, p.1

BattCellular(09-02BD78-7-8)


Markets for Electronic Devices

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