Recylex will close its secondary lead smelter in Belgium in response to structural losses at the plant, the company announced on Monday June 24.

The closure comes as Recylex and other secondary lead producers struggle to overcome overcapacity and high scrap battery prices in Europe.

“In spite of internal efforts and numerous investments aimed at improving the performance of the smelter facility, changing market conditions have taken a heavy toll on the operating performance of this business, which has become a structural loss-maker,” Recylex said on Monday.

Last year Recylex recorded a €1.2 million impairment on shares in the subsidiary which owns the smelter, FMM SA, after the plant failed to break even despite recording average lead prices of €1,603 per tonne during the year.

The FMM plant produced 10,000 tonnes of secondary lead in 2012, contributing 6.57% of the group’s overall lead production, which stood at 152,300 tonnes.

Recylex’s primary and secondary plant in Nordenham produced a record 142,300 tonnes during the year, contributing strongly to overall group sales of €471 million.

The company has seen its profit margins from secondary lead production disintegrate in recent years as overcapacity in Europe has promoted stiff competition for scrap batteries.

The business recorded losses of €6.6 million in 2012, compared with a €48,000 gain in the previous year, partly as a result of the FMM impairment.

“There is no sign of capacity closing, so we expect no major change in the trend this year, in terms of strong competition for batteries. Some recyclers are suffering,” a Recylex spokesperson told Metal Bulletin in March.

Mark Burton
Twitter: @mburtonmb