Lithium prices rebound temporarily in August while cell prices keep falling

Lithium price

Lithium prices weakened in early August and rebounded later.

Battery-grade lithium carbonate prices continued to decline in early August, bottoming out in late August and then rebounded. The average prices for lithium concentrate stabilized in late August. As of August 31, spot prices for battery-grade lithium carbonate came in at RMB 73,000-77,000/MT, averaging RMB 75,000/MT at the month's end, a 7.4% month-on-month decrease. For Chinese lithium spodumene concentrate (SC6), CIF prices reached USD 730-830/MT, averaging USD 780/MT at the month's end, a 15.2% month-on-month decrease.

Battery-grade lithium carbonate experienced temporary rebounds in August. As prices bottomed out, high-cost manufacturers saw profits shrink and even turn into losses. This caused a slight utilization rate drop across the industry, with manufacturers becoming more determined to keep prices steady. Albemarle completed a spodumene tender at Australia’s Wodgina mine in late August, with a final price of RMB 6,300/MT, corresponding to a lithium carbonate production cost of RMB 80,000/MT. This price may influence the market in the short term. As the traditional peak season (September-October) approaches, some leading battery and material manufacturers increase production. With battery-grade lithium carbonate prices near their lowest point, stocking demand increased in small quantities, which drove prices up later in the month. However, whether downstream demand will meet expectations remains to be seen.

Given ongoing oversupply in the second half of the year, most leading manufacturers focus on periodic adjustments. With weak downstream demand, lithium prices would remain at the bottom, with little chance of a rebound.
 

Energy-storage cell price

Prices of LFP cells for energy storage in China continued to decline.

LFP cell prices for energy storage in China continued to fall in August. As of August 31, prices for 280Ah LFP cells stayed at RMB 0.28-0.37/Wh after tax, averaging RMB 0.33/Wh, a 4.4% month-on-month decrease. Prices for 314Ah LFP cells sat at RMB 0.3-0.37/Wh, averaging RMB 0.34/Wh, a 2.9% month-on-month decrease. China’s auctions for utility-scale energy storage projects in August drive demand for 314Ah cells, with orders for which growing continuously, reducing the market share of 280Ah cells. Some manufacturers lowered prices to clear out 280Ah cells, pushing prices below RMB 0.3/Wh. Most manufacturers have achieved mass production of 314Ah cells. Early adopters have sectured orders and improved their manufacturing process and quality based on feedback, allowing them to grab more market share amid price and homogeneous competitions.

Installations in major residential storage markets in Europe saw a quarter-on-quarter decrease in the first half of the year, with no significant demand rebound. Prices for 100Ah LFP energy storage cells kept falling, especially from Tier-3 manufacturers. Prices reached RMB 0.34-0.37/Wh, averaging RMB 0.36/Wh, a 4.1% month-on-month decrease.

Cell prices hit new lows. While the decline has slowed, overcapacity will sustain in the short term. Some manufacturers are lowering prices to maintain utility rates and secure orders. The drop in lithium carbonate prices below RMB 80,000/MT allows for further cell price decline. Price wars will continue in the second half of the year. Amid intensified competition, manufacturers need to improve cell consistency, address safety issues like heat dissipation, and strengthen brand reputation to survive the industry shakeout.