Lithium prices experience short-term flucturation and rebound, while cell prices decline continuously

Lithium price

Price fluctuation and rebound in lihthium prices ceased.

Spot prices for battery-grade lithium carbonate stood at RMB 75,000-79,000/MT as of September 30. The average price was RMB 77,000/MT at the end of the month, up 2.2% MoM. CIF prices for Chinese lithium spodumene concentrate (SC6) came in at USD 750-840/MT and averaged USD 795/MT at the end of the month, up 1.9% MoM.

Prices for battery-grade lithium carbonate rebounded after fluctuations, followed by a new round of price decline in September, arriving nearly RMB 70,000/MT and then bounced back again, with prices ranging RMB 70,000-80,000/MT throughout the month.

Announcements of production halt this month help lift the sluggish lithium prices in the short term. On September 10, a leading battery manufacturer is reportedly to adjust its production plan at its lepidolite mining site in Jiangxi or even suspend some of its production lines. Jiuling Lithium announced the next day that its majority owned subsidiary will conduct a 15-day equipment maintenance. Spot prices for battery-grade lithium bounced back following the news. 

After prices for battery-grade lithium carbonate dropped to RMB 70,000/MT, the level has reache below the cost line for some Chinese lepidolite producers. The production cut of lepidolite has caused a short-term impact on output, but from an annual perspective, the increase in lithium carbonate production is still higher than the growth in downstream demand

Production of battery-grade lithium carbonate decreases in September due to equipment maintenance of some manufacturers. Coupled with rising demand driven by downstream stocking up, mismatched supply and demand of battery-grade lithium carbonate has tempoeraily eased this month, with inventory depleting. Yet, overall inventory level remains high.  

With September coming to the end and October begins, the downstream secor will remain cautious and purcase on demand to avoid inventory piling up. Lithium carbonate prices are expected to decline further.
 

Energy-storage cell price

Price downward trend continues for LFP cells in China.  

Prices for LFP cells in China continued its downward trend in September under pressure of price competition and inventory depletion. As of September 30, the price range for 280Ah LFP cells after tax was RMB 0.27-0.35/Wh, with an average price of RMB 0.31/Wh, down 4.6% MoM. The price range for 314Ah LFP cells after tax was RMB 0.29-0.36/Wh, with an average price of RMB 0.33/Wh, a decrease of 3.0% MoM.

After September, the industry will enter the critical fourth quarter for achieving sales targets. Currently, energy storage battery production capacity is sufficient, but some Tier-2 and 3 energy storage manufacturers are operating at relatively low utilization rates and still need to cut prices markedly to drive the consumption of their 280Ah cells in inventory.

Since the beginning of this year, several auction project documents in China have set price limits for energy storage cells and systems. In September, a certain power grid company capped the maximum price for 314Ah cells at RMB 0.305/Wh, indicating that the price of cells for utility-scale energy storage projects is still going downwardly. In addition to auction for utility-scale energy storage projects, price competition pressure has gradually extended to the C&I sector. During the energy storage trade fair held in early September, some manufacturers paired low-priced cells with their C&I energy storage systems to sell at a price below RMB 0.6/Wh.

As demand for 314Ah cells increases in China, many energy storage cell manufacturers have switched their lines to produce 314Ah cells mainly. More manufacturers are expected to complete overseas certification for these cells by the end of the year, and shipments to overseas markets are anticipated to continue growing. The penetration rate of 314Ah cells is expected to further increase in the fourth quarter.

This year, some companies’ capacity for 100Ah cells remains in surplus, with weak demand for 100Ah, making it difficult to see a turning point amid price decline. As of September 30, the price range for 100Ah LFP cells has dropped to RMB 0.32-0.37 RMB/Wh ater tax, with an average price of RMB 0.35/Wh, a decrease of 2.8% MoM.

Amid intense price competition most energy storage cell companies are struggling to achieve profitability. As the industry enters the final sprint of 2024, relying solely on low-price strategies and offering favorable payment terms to secure orders may not sustain long-term development. In this increasingly competitive environment, some companies are actively promoting technological innovation, upgrading processes, reducing costs, improving product quality, and establishing advantages in cost and distribution channels, as well as creating product differentiation to secture market share, with a significant increase in shipments this year. Leading manufacturers, meanwhile, continue to control costs while leveraging their high-quality products and brand premium to maintain a competitive edge in both securing orders and pricing.