Lithium Spot Price Trends: Prices Rebound Temporarily in August While Cell Prices Keep Falling

In August, the lithium market experienced fluctuating trends, with lithium prices temporarily rebounding towards the end of the month after a continued decline in early August. Meanwhile, energy-storage cell prices in China continued to fall. This article provides an in-depth analysis of the lithium spot price trends and the latest developments in energy-storage cell prices, shedding light on the market dynamics and factors influencing these changes.

Lithium Spot Price Trends in August 2024

Early August Lithium Spot Price Decline

Battery-grade lithium carbonate prices continued to weaken in early August, maintaining a downward trajectory seen throughout the year. The decline persisted until late August when prices bottomed out before stabilizing. Despite these challenges, the lithium spot price showed signs of recovery later in the month.

As of August 31, battery-grade lithium carbonate spot prices ranged between RMB 73,000 and RMB 77,000 per metric ton, with an average price of RMB 75,000 per metric ton. This marks a 7.4% month-on-month decrease. Similarly, Chinese lithium spodumene concentrate (SC6) prices on a CIF basis were recorded at USD 730 to USD 830 per metric ton, with an average price of USD 780 per metric ton, reflecting a substantial 15.2% month-on-month decrease.

Temporary Lithium Spot Price Rebound in Late August

Battery-grade lithium carbonate experienced a temporary rebound in late August. This slight recovery was driven by various factors:

1. High-Cost Manufacturers' Profit Losses: With prices nearing their lowest point, high-cost manufacturers faced shrinking profit margins, some even operating at a loss. This led to reduced production utilization rates and a concerted effort to stabilize prices to minimize further losses.
2. Albemarle’s Spodumene Tender Impact: In late August, Albemarle completed a spodumene tender at Australia’s Wodgina mine, setting a final price of RMB 6,300 per metric ton. This corresponds to a lithium carbonate production cost of around RMB 80,000 per metric ton, a key figure that may influence the short-term market trend.
3. Increased Stocking Demand: As the traditional peak season approaches in September and October, leading battery and material manufacturers ramped up production to meet expected higher demand. Stocking activities in small quantities helped drive the lithium spot price up later in the month.

Current Import-Export Landscape and Regional Price Differences on Lithium Spot Price

• Asia Pacific:
  • Increased demand in the region has led to a relatively stable lithium spot price.
  • Regional production expansions and robust supply chains help maintain price stability.
• Europe:
  • Greater price fluctuations due to the influence of low-cost lithium imports.
  • Import dynamics and energy policies play a significant role in affecting prices.
• North America:
  • Prices are influenced by supply constraints and increased demand from the electric vehicle (EV) sector.
  • Market players are focusing on securing local supply chains to mitigate external risks.
• Latin America:
  • Major lithium producers such as Chile and Argentina drive regional price trends.
  • Export regulations and international agreements impact lithium availability and pricing.

Market Outlook for Lithium Spot Prices

Despite the short-lived rebound, the market outlook for lithium spot prices remains uncertain. Given the ongoing issue of oversupply, most leading manufacturers are focusing on periodic adjustments to balance supply and demand. With downstream demand still relatively weak, lithium spot prices are likely to remain at the bottom for the foreseeable future, with little chance of a significant rebound.

Industry Adaptations and Strategies for Lithium Spot Prices

In response to these challenging market conditions, manufacturers are expected to employ strategies such as reducing production, stabilizing prices, and improving production efficiencies. These measures are crucial to weathering the oversupply challenges and preparing for a potential market recovery in the long term.

Energy-Storage Cell Price Trends Impacted by Lithium Spot Prices

Continued Decline in LFP Cell Prices Due to Lithium Spot Price Trends

Prices of lithium iron phosphate (LFP) cells used in energy storage continued to decline in August, mainly due to oversupply and weak market demand. As of August 31, prices for 280Ah LFP cells in China ranged between RMB 0.28 and RMB 0.37 per watt-hour (Wh), averaging at RMB 0.33 per Wh, representing a 4.4% month-on-month decrease. Prices for 314Ah LFP cells also dropped to RMB 0.3-0.37 per Wh, with an average price of RMB 0.34 per Wh, reflecting a 2.9% month-on-month decrease.

In August, China’s auctions for utility-scale energy storage projects boosted demand for 314Ah cells, driving orders up significantly. This trend led to a decrease in the market share of 280Ah cells, as some manufacturers lowered prices to clear out inventory, pushing prices below RMB 0.3/Wh. Most manufacturers have now achieved mass production of 314Ah cells, and early adopters have secured substantial orders while continuously improving their manufacturing processes based on market feedback.

European Residential Storage Market Trends Affected by Lithium Spot Price Decline

The European residential energy storage market saw a quarter-on-quarter decrease in installations during the first half of the year, with no significant rebound in demand observed. This has further impacted the prices of 100Ah LFP energy storage cells, particularly from Tier-3 manufacturers. By the end of August, 100Ah LFP cell prices ranged between RMB 0.34 and RMB 0.37 per Wh, reflecting a 4.1% month-on-month decrease.

Future Market Outlook for Energy Storage Cells in Light of Lithium Spot Price Trends

In the short term, the energy-storage cell market is expected to face continued price declines due to ongoing oversupply and intense competition. Some manufacturers are opting to lower prices to maintain utilization rates and secure orders. As lithium carbonate prices fall below RMB 80,000 per metric ton, further cell price declines are anticipated. Price wars will likely continue in the second half of the year, making it essential for manufacturers to enhance product consistency, address safety concerns such as heat dissipation, and strengthen brand reputation to navigate through the industry shakeout successfully.

Ｗhile the lithium spot price showed a temporary rebound in August, the long-term outlook remains uncertain due to oversupply and weak downstream demand. Energy-storage cell prices, on the other hand, continued to decline and are expected to face further downward pressure in the coming months. For manufacturers, the key to staying competitive will be to innovate and adapt, focusing on product quality and safety to weather the challenges ahead.