Lithium prices keep falling while cell prices slip slightly

Lithium price

Lithium price declines continued in July

Price declines for battery-grade lithium carbonate and lithium concentrate continued in July. As of July 31, spot prices came in at RMB 79,000-83,000/MT, averaging RMB 81,000/W at the month's end, an 11.5% month-on-month decrease. For Chinese lithium spodumene concentrate (SC6), CIF prices reached USD 870-970/MT, averaging USD 920/MT at the month's end, a 10.2% month-on-month decrease.

Lithium prices remained low in July.

Despite a brief market fluctuation caused by the earthquake in Chile, lithium prices saw persistent oversupply amid gloomy demand as the traditional low season falls upon.  Meanwhile, Chinese manufacturers continue producing lithium salt without signs of production cuts, leaving a higher supply level. Thus, lithium prices would hardly rebound.

Given the sustained oversupply, lithium prices would remain at the bottom in the second half of 2024. Future supply-demand dynamics require observations for production cuts and end-user demand.
 

Energy-storage cell price

Prices of LFP cells for energy storage in China fell slightly in July, with price gaps narrowing.

LFP cell prices for energy storage in China fell slightly in July. As of July 31, prices for 280Ah LFP cells stayed at RMB 0.29-0.39/Wh, averaging RMB 0.34/Wh, a 2.9% month-on-month decrease. Prices for 314Ah LFP cells sat at RMB 0.3-0.39/Wh, averaging RMB 0.35/Wh, a 4.2% month-on-month decrease.  Given the tight cost level, there was limited room for price reduction despite slipped prices. Most manufacturers delivered at RMB 0.31-0.33/Wh. The price gap between 314Ah and 280Ah cells further narrowed. To seize the market share of 314Ah iteration, some manufacturers offered prices the same as or below those of 280Ah cells. Since the theoretical cost of 314Ah cells is lower than that of 280Ah cells, prices for 314Ah cells will be lower than that of 280Ah cells.

With no significant improvement in the residential storage market, prices for 100Ah LFP cells continued falling, reaching RMB 0.34-0.4/Wh, averaging RMB 0.37/Wh, a 2.6% month-on-month decrease.

Fierce competition in the energy storage cell market will continue into the second half. Manufacturers may cut prices to attract more orders and meet annual targets, potentially driving down prices. However, given LFP cell prices have plunged to near break-even points, there is limited room for further price drops. The intense competition in China will force companies to expand abroad. However, expanding to foreign markets is no easy task as it requires localization in product development, personnel, and supply chain. Companies should be cautious and prioritize stability when considering going global.