By Lucy Hornby
BEIJING (Reuters) - As the red light changes, Han Zhang turns the handlebar
of his battery-driven bike, pushes off with his foot, and whirrs silently
along a Beijing boulevard.
His yellow bike looks like something between a bicycle and a scooter,
but to the lead industry, he's driving a car.
Every year, millions of Chinese are hitting the streets on "e"
bikes - battery-powered contraptions that are increasingly popular as
soaring fuel prices make traditional motorbikes and scooters expensive
to drive.
The bikes are getting bigger, faster and more glamorous - and the growing
size of their batteries is soaking up increasing amounts of lead.
"Everyone looks at the "e" bike as a replacement for
a motorbike. But for the lead industry it's an astonishing change. In
terms of lead demand, one "e" bike is one car," said
Mark Stevenson, technical manager for lead at Nyrstar in Australia.
"If someone says there is growth of a million bikes a year, the
lead industry thinks 'who cares'. But if you say a growth of a million
cars per year, that changes the whole picture."
Yet a 48-volt bike battery uses just under 10 kilograms of lead, similar
to that used by a medium-sized car like a Toyota Camry. They last for
about a year, compared with over three years for a typical car battery.
"There's a huge amount of lead being carried around on bikes in
China," said Huw Roberts of CHR Metals Ltd. He estimates the bikes
produced through the end of last year have absorbed about 400,000 tons
of lead.
That new source of demand could help drive up lead prices, which hit
a record high of $3,835 a ton on October 9.
Lead has been the star performer on the London Metal Exchange and is
up by 130 percent this year.
SILENT FORCE
China produced 19 million battery driven bikes in 2006, and that figure
could rise by 30 percent this year, said Zhang Changhai, lead analyst
with metals consultancy Antaike in Beijing.
"The explosive growth is already over, and we expect new standards
being developed for the larger bikes to slow growth in 2008," Zhang
said.
The standards for newer, 48-volt bikes could be along the lines of
those for the more common 36-volt bikes, limiting speed and size and
setting guidelines for which companies can produce them to weed out
cut throat competition.
Estimates for how many companies produce "e" bikes vary from
100 to 300 firms, but all agree that their low design and start-up costs
have driven margins to the bare minimum, eroding profits for more established
firms like Shanghai Forever
Meanwhile, 72-volt bikes that are as big and powerful as motorcycles
are alarming city governments. They have been banned in the southern
boom cities of Guangzhou, Shenzhen and Zhuhai.
"When you have these things whizzing along in the bike lanes at
60 kilometers an hour it's getting a little dangerous," Roberts
said.
"They are known as the 'silent killer' because you can't hear
them coming."
Other cities are trying to limit the bikes' speed and size, and may
soon require licenses to use them.
Other innovations include bikes that use lithium-ion batteries which
generally last longer and give more power for their weight.
With prices above 3,000 yuan ($400), they have found an export niche.
But in the domestic market, they are unlikely to replace bikes using
lead-acid batteries which cost between 1,000 yuan and 2,000 yuan.
At a bicycle shop in central Beijing, salesman Zhang Guangyi pointed
to his best selling model, a long black bike with flames painted along
its body. It only costs about 1 yuan to charge the bike enough for 240
kilometers of use, he noted.
"Who drives motorbikes anymore? Fuel is too expensive and these
have no emissions so they are better for the environment - its popular
to think about that these days."
($1=7.516 Yuan)
© Reuters
2007. All Rights Reserved.
