Saturday, July 13, 2024

TrendForce Reports: China’s Oversupply of Lithium Carbonate Depresses Battery Cell Prices

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China’s lithium carbonate market continues to grapple with oversupply issues, pushing prices to a new low for the year, market research firm TrendForce reported on July 8.

The price of lithium carbonate in China dropped from over RMB 100,000 per ton last month to approximately RMB 90,000, reflecting ongoing oversupply challenges that are difficult to resolve in the short term, according to the report.

As raw material costs decline, the cost of battery production is also decreasing, driving down prices of power battery cells, TrendForce noted. In June, battery cells for electric vehicles (EVs) saw a decrease of about 1% to 2% compared to May.

Specifically, square ternary cells for EVs averaged RMB 0.49 per Wh in June, down 2.2% from May, while square lithium iron phosphate (LFP) cells averaged RMB 0.42 per Wh, down 2.6%. Soft-pack ternary cells averaged RMB 0.51 per Wh, down 1.2% from May. The average price of square LFP cells for energy storage declined by 4.2% to RMB 0.41 per Wh.

The report highlighted that the recent peak in mid-year purchasing has subsided, with orders for energy storage batteries showing signs of decline. The reduction in lithium carbonate prices has further intensified price competition in the energy storage sector, pushing prices even lower than many vendors’ cost ranges.

Looking ahead, TrendForce anticipates continued downward pressure on battery cell prices in the early third quarter, with potential for stabilization or rebound contingent on inventory replenishment demand during the peak season towards the end of the third quarter.

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