Lithium carbonate prices rebound while energy-storage cell prices sustain after slipping

Lithium carbonate

The price of battery-grade lithium carbonate in China rebounded in February. As of February 29, spot prices stayed at RMB 96,000-102,000/MT, averaging RMB 99,000/MT at the month's end, a 3.7% month-on-month increase. For Chinese lithium spodumene concentrate (SC6), CIF prices dropped to USD 830-950/MT, averaging USD 890/MT at the month's end, on par with the previous month.

With lithium prices falling to the world’s average marginal cost, changes on the supply side emerged in 2024. In Australia, the Finniss Lithium Operation decided on January 5 to halt mining temporarily, the Greenbushes mine announced on January 29 to reduce production targets, and the Wodgina project posted on February 22 delays in production capacity ramp-up. Delays and suspensions will affect around 160,000 MT LCE of production in 2024. The smelting sector faces negative profit margins, but the growth of lithium-ion battery production has been slower than the increase in lithium supply.

The market will see a 134,000-MT lithium oversupply (11.3% of global demand) in 2024. Therefore, despite the short-term boost in prices due to some post-holiday restocking and upcoming environmental inspections in Jiangxi, prices will not increase substantially, approaching the comprehensive cost curve for a supply-demand equilibrium. Most cathode manufacturers strive to operate with low inventory in a lackluster market. InfoLink maintains the estimation of average battery-grade lithium carbonate prices at RMB 78,000/MT (value-added tax excluded) in 2024.
 

Energy-storage cell

LFP energy-storage cell prices in China held steady after a slip in February. As of February 29, prices for 280 Ah LFP energy-storage cells have fallen to RMB 0.33-0.45/Wh, averaging RMB 0.39/Wh at the month's end, a 7.1% month-on-month decrease. For 100 Ah LFP energy-storage cells, prices rose to RMB 0.39-0.5/Wh, averaging RMB 0.44/Wh at the month's end, on par with the previous month.

After production cuts and downtime during the Lunar New Year holiday, a slight price hike emerged as demand from the cell sector strengthened. In March, planned energy-storage cell production in China will increase by 10% month-on-month. Currently, the mode of 280 Ah/0.5 C energy-storage cell prices is RMB 0.35/Wh, reaching RMB 0.33/Wh for bulk orders. Leading manufacturers offer price quotes at RMB 0.38/Wh or RMB 0.36/Wh for bulk orders.

Based on statistics from the Global Lithium-lon Battery Supply Chain Database of InfoLink, the direct material cost of 280 Ah LFP energy-storage cells currently comes in at around RMB 0.282/Wh due to the constantly diminishing material prices. The total production cost (including sales, management, and manufacturing costs, excluding factory depreciation) is RMB 0.338/Wh. Leading manufacturers have raised utilization rates in February and March, but their Tier-2 and Tier-3 peers keep low utilization rates and will continue offering price quotes close to the break-even point until demand recovers. Material prices left little room for battery price declines. With cell manufacturers actively exploring more lucrative non-China markets, oversupply risks will likely decrease in the second quarter, reaching a theoretical supply-demand equilibrium.