"It is difficult to estimate when those closed plants can restart production," Cao said. "That must wait until they meet governments' standards."

China produced 160.2 million Kilovolt-Ampere Hour of lead- acid batteries last year, which used 3.13 million tons of lead, according to the association's estimates. This accounts for 83.5 percent of total lead usage, assuming lead consumption at 3.75 million tons, according to the association.

Global usage of lead will increase 6.1 percent to 10.15 million tons in 2011, while production will climb 7.3 percent to
10.34 million tons, resulting in a 188,000-ton surplus, the International Lead and Zinc Study Group forecast in October.

"It opens up a very interesting question though -- who is still producing and how much battery capacity has been lost going into the peak demand replacement battery winter season," Nick Trevethan, a Singapore-based analyst with Australia & New Zealand Banking Group Ltd., said. "There may be a loss of demand from the e-bike market facing higher costs, but in terms of vehicle SLI batteries, demand is very price inelastic." SLI batteries are used in automobiles.

Eoin Treacy's view Lead prices, in common with those of other industrial commodities have deteriorated this year. Prices hit a medium-term peak in April, with a weekly key reversal, and have posted a progression of lower rally highs since. It found at least short-term support in the region of $2000 from October but needs to sustain a move back above the 200-day MA to suggest a return to medium-term demand dominance.

Declining lead prices have not resulted in cheaper products which should flatter the margins of related businesses. Enersys Inc is the leading manufacturer of industrial batteries. It completed a Type-3 top in July and pulled back to test the 2010 lows. It broke out of the short-term base three weeks ago and has returned to test the 200-day MA. Provided it can hold above the $22 region the medium-term upside can probably be given the benefit of the doubt.

Johnson Controls has also rallied back to test its 200-day MA but needs to sustain a move above it to indicate a return to medium-term demand dominance.