In July, China’s electric vehicle (EV) battery market showed signs of stability as lithium salt prices experienced a marginal decline. The prices of EV square ternary cells, LFP cells, and pouch ternary power cells remained relatively consistent compared to the previous month, indicating steady market conditions. According to TrendForce research, the trend can be attributed to relatively muted demand in the EV sector during the same period.
On the other hand, energy storage batteries experienced a steady market demand, leading to a slight decrease in average prices of 1 percent MoM, dropping to CNY 0.66/Wh. This price decline was driven by the reduction in prices of LFP cathode materials. The energy storage battery market is currently facing overcapacity, leading to intensified competition and pointing towards a continuous, albeit slow, price drop. Recently quoted prices for energy storage project bids have even fallen below 0.6/Wh.
Consumer batteries, however, faced weakening demand in the consumer electronics market, prompting battery manufacturers to reduce their capacity utilization rates. The slight uptick in the price of cobalt metal prevented a significant drop in battery prices, which remained mostly consistent with the previous month. Nonetheless, LCO battery prices are predicted to continue their downward trajectory in August due to slow decreases in raw material prices, such as lithium salt and cobalt [II, III] oxide, as well as lackluster downstream demand.
In July, the Guangzhou Futures Exchange listed seven lithium carbonate futures contracts, which initially experienced a major decline but later managed a recovery. However, they remained on a downward trend relative to the listing’s benchmark price. Spot lithium carbonate prices also witnessed a 5 percent MoM fall in average prices during the same month.
TrendForce attributes these price trends to structural overcapacity across various segments of China’s lithium-ion battery industry chain, leading to downward pressure on supply chain prices. Among these, the price of lithium metal, with the most significant impact on supply chain prices, is gradually stabilizing, reducing the likelihood of major fluctuations. The listing of lithium carbonate futures has set the trend for spot prices in the next six months to a year. In the short term, the overall price changes in the lithium-ion battery supply chain are expected to stabilize. However, TrendForce does not rule out the possibility of minor rebound in lithium salt prices during the peak demand period in the fourth quarter.