China’s lithium battery industry is set to grapple with overcapacity issues through 2024, leading to a further decline in power battery prices in the coming year, according to a report released by market research firm TrendForce.
Despite a positive outlook for China’s lithium battery exports in 2024, the ongoing expansion of production capacity throughout this year will contribute to a persistent overcapacity situation, the report highlighted.
In October, China’s average power battery cell prices continued to experience a downward trend, although the rate of decline was somewhat moderated compared to previous months, the report noted.
Specifically, power cells for electric vehicles (EVs) dropped approximately 2 percent in October compared to September, while lithium cobaltate cells for consumer electronics decreased by 1.3 percent month-on-month. The most significant decline was observed in energy storage cells, which fell by 3.3 percent month-on-month, as indicated by TrendForce.
The report provided price data for various battery cell types in China. The average price of square ternary cells for EVs was RMB 0.57 ($0.078) per watt-hour (Wh) in October, reflecting a 2.2 percent decrease from September.
Square lithium iron phosphate (LFP) cells recorded an average price of RMB 0.52 per Wh in October, marking a 2.4 percent reduction from the previous month. Meanwhile, soft pack ternary cells saw an average price of RMB 0.61 per Wh in October, representing a 2.2 percent decrease compared to September.
For energy storage applications, the average price of square LFP cells in October was RMB 0.5 per Wh, marking a substantial 3.3 percent decrease from September.
Furthermore, the decline in battery cell prices has had a cascading effect on the prices of upstream raw materials. The weakening demand in the power battery market has reduced the willingness of battery cell manufacturers to replenish inventory, leading to a continued slide in the prices of lithium battery raw materials, as outlined by TrendForce.
Notably, the price of battery-grade lithium carbonate, a crucial raw material for batteries, experienced a downward trajectory. On November 7, it was quoted at RMB 165,000 per ton, marking the ninth consecutive day of decline and a decrease of RMB 1,000 per ton from the previous day. Since June 25, the average price of battery-grade lithium carbonate has plummeted by 48 percent from RMB 315,000 per ton.
Market observers attribute this sustained decline in lithium carbonate prices to a supply-demand imbalance, with some experts suggesting that prices may continue to decrease further, as reported by Securities Daily.
