Lithium carbonate prices rebound, while cell prices hold steady in January

Lithium price

Lithium carbonate prices rebounded, while SC6 prices kept rising in January.

Spot prices for battery-grade lithium carbonate stood at RMB 76,000-78,000/MT as of January 31. The average price was RMB 77,000/MT at the end of the month, up 2.0% MoM. CIF prices for Chinese lithium spodumene concentrate (SC6) came in at USD 850-905/MT, averaging USD 878/MT by month-end, up 5.1% MoM.

In early January 2025, battery-grade lithium carbonate prices showed an upward trend due to multiple factors.

• Pre-holiday stockpiling: Downstream cathode material manufacturers increased purchases before the Lunar New Year.
• Production cuts: Some lithium salt manufacturers halted production for maintenance, leading to stronger price-holding sentiment.
• Lower domestic production and utilization rates: Both domestic lithium carbonate production and utilization rates saw MoM declines, further driving up prices.
• Geopolitical risks: Unrest in Nigeria and Mozambique raised concerns over potential disruptions to African lithium concentrate shipments, intensifying market volatility and reinforcing supply shortage expectations, further contributing to price hikes.

Non-China miners maintained a strong price-sustaining sentiment, causing spodumene concentrate prices to continue their uptrend from December 2024 into January 2025.

• Cost-driven price transmission: Lithium salt producers passed on cost pressures, reinforcing price support for battery-grade lithium carbonate.
• SQM’s January auction results: Spodumene concentrate (SC6) was sold at CIF USD 921.3/MT, translating to a lithium salt production cost exceeding RMB 80,000/MT, reinforcing market expectations for higher prices.
• Pre-holiday slowdown: As the Lunar New Year approached, both supply and demand moderated, resulting in falling trading volumes and stabilized battery-grade lithium carbonate prices.

Battery-grade lithium carbonate prices in February will continue to be impacted by production costs, supply-demand dynamics, and market sentiment. Key uncertainties include:

• Post-holiday lithium salt plant resumption: The speed at which lithium salt producers restart production after the Lunar New Year will impact supply.
• Lithium ore price fluctuations: Any changes in spodumene or brine lithium prices will affect production costs.
• Downstream demand sustainability: It remains uncertain whether the strong demand from NEV sales and non-China energy storage orders will continue.

Potential Scenarios:

• If NEV sales and non-China energy storage orders remain strong, downstream demand could rebound quickly. If lithium salt production restarts slowly, prices may rise to around RMB 80,000/MT.
• If supply recovers faster than demand, prices could retreat to around RMB 76,000/MT.
   

Energy-storage cell price

Average prices for LFP cells in China stabilized in January.

Prices for LFP cells in China stabilized at the bottom in January. As of January 31, the after-tax price range for 280Ah LFP cells was RMB 0.25-0.34/Wh, with an average price of RMB 0.295/Wh, the same as last month. The price range for 314Ah LFP cells stayed at RMB 0.25-0.35/Wh, with an average price of RMB 0.30/Wh. The after-tax price range for 100Ah LFP cells was RMB 0.31-0.36/Wh, with an average price of RMB 0.335/Wh, the same as last month.

China's energy storage market entered its slow season in January. Demand from buyers dropped, stockpiling stopped, and orders for energy storage cells declined. Material prices remained stable with slight increases in lithium carbonate and LFP, keeping cell prices low and unchanged at the bottom.

Some utility-scale energy storage projects are revising their bid evaluation rules. They may reduce the focus on price and change how benchmark prices are set. At the same time, stricter product performance and safety requirements are being introduced, pushing companies to prioritize quality over price competition.

In 2025, energy storage cell production will likely remain oversupplied. Leading companies may grow their market share with technological and channel advantages, while weaker producers face elimination. To keep operations running, some companies might lower prices and reduce profit margins. With material costs stabilizing in 2025, price competition will ease, and cell prices may drop more slowly. Some companies have also introduced 500Ah+ large-capacity cells, which will enter mass production and market applications in 2025, driving product upgrades and advancements in the industry.