Lithium carbonate prices weakened in May while cell prices remained low

Lithium carbonate prices

Prices of battery-grade lithium carbonate in China continued to fluctuate in May.

Lithium prices kept dropping after a slight rebound in early May. As of May 31, spot prices came in at RMB 104,000-108,000/MT, averaging RMB 106,000/W at the month's end, a 4.9% month-on-month decrease. For Chinese lithium spodumene concentrate (SC6), CIF prices reached USD 1,030-1,110/MT, averaging USD 1,070/MT at the month's end, a 1.9% month-on-month increase.

Severe oversupply sustained in May. Lepidolite production in Jiangxi recovered from impacts of environmental protection concerns, resuming production, and generating higher output; As the weather gets hot, production volumes of brines in Qinghai increased. According to Chilean customs data, Chile exported 22,900 MT of lithium carbonate to China in April, a 157% year-on-year growth. The deliveries arrive in batches during May and June, providing strong supply for China.

On the demand side, both automotive and energy storage markets were steady in May. The automotive market kept expanding but showed no increase higher than expected. The effect of the trade-in policy required further observation. In the energy storage market, stockpiling activities in the mid-year  were coming to an end.

The lithium market will fluctuate at RMB 90,000-120,000/MT in 2024. Oversupply will persist from 2024 to 2025, and lithium prices will slowly decline amid fluctuations in the second half of 2024.
 

Energy-storage cells

LFP energy-storage cell prices in China held steady in May, with subtle decreases.

As of May 31, prices for 280 Ah LFP energy-storage cells decreased 2.8% month-on-month to RMB 0.30-0.40/Wh, averaging RMB 0.35/Wh. Few Tier-2 manufacturers raised cell prices amid tight supply. 300 Ah cells had been on the rise, with 314 Ah cells seeing steady increases in penetration rates. For some manufacturers, 314 Ah cells accounted for over 35% of their individual shipment. Currently, market penetration is concentrated. As for prices, 314 Ah cells landed at RMB 0.32-0.42/Wh, averaging RMB 0.37/Wh. Leading manufacturers quoted prices for 314 Ah cells a bit higher than 280 Ah ones amid tight supply, while some Tier-2 and Tier-3 peers contended for market shares by offering the same price quotes for 314 Ah and 280 Ah cells for individual orders.

The price gap between the two cells will likely shrink as mass production continues and price wars intensify. For 100 Ah LFP energy-storage cells, prices fell to RMB 0.36-0.43/Wh in the gloomy residential energy-storage market, averaging RMB 0.395/Wh, a 4.8% month-on-month decrease.

China’s new national standard for energy storage lithium-ion batteries will soon take effect in July. Given that, apart from cutting prices to attract more orders, cell manufacturers must value quality and brand reputation to stand out in the energy-storage market and earn brand premiums.