The oversupply of lithium carbonate in China is exerting downward pressure on power battery cell prices, leading to a continuous decline, according to market research firm TrendForce. The current oversupply situation is challenging to resolve in the short term, resulting in a new low for lithium carbonate prices of around RMB 90,000 ($13,750) per ton, down from RMB 100,000 per ton last month.
As raw material prices continue to decrease, the cost of battery production is declining, which subsequently affects the price of power battery cells. In June, battery cells for electric vehicles (EVs) experienced a decline of 1 to 2 percent compared to May. The average price of square ternary cells for EVs was RMB 0.49 per Wh, down 2.2 percent from the previous month. Similarly, the average price of square lithium iron phosphate (LFP) cells decreased by 2.6 percent to RMB 0.42 per Wh in June. Soft-pack ternary cells also saw a decline of 1.2 percent to RMB 0.51 per Wh.
Energy storage batteries, specifically square LFP cells, witnessed a significant decrease in price. In June, the average price of square LFP cells fell by 4.2 percent to RMB 0.41 per Wh. The mid-year intensive purchasing peak has passed, resulting in a decline in orders for energy storage batteries. Moreover, the decreasing prices of lithium carbonate pose challenges in establishing stable support for energy storage battery prices, causing further price declines.
The intense price competition in the energy storage market has led to prices lower than the cost range of most vendors. Battery cell and system vendors are resorting to low-pricing strategies to secure orders, intensifying the competition. TrendForce forecasts that battery cell prices will continue to face downward pressure in the early third quarter. However, there is hope for price stabilization or a rebound during the peak season towards the end of the third quarter when inventory replenishment demand is expected to increase.
In conclusion, the oversupply of lithium carbonate in China continues to have a significant impact on the prices of power battery cells. The ongoing decline in raw material prices and intense competition in the market are contributing factors to the downward trend. While the short-term prospects remain challenging, there is optimism for price stabilization and recovery in the coming months.
FAQ: Lithium Carbonate Oversupply and its Impact on Power Battery Cell Prices
1. What is the current situation of lithium carbonate oversupply in China?
There is currently an oversupply of lithium carbonate in China, which is resulting in downward pressure on power battery cell prices.
2. How is the oversupply affecting the prices of lithium carbonate?
The oversupply situation is challenging to resolve in the short term, leading to a new low for lithium carbonate prices, with a recent price of around RMB 90,000 ($13,750) per ton, down from RMB 100,000 per ton last month.
3. How does the decrease in raw material prices impact battery production costs?
As raw material prices continue to decrease, the cost of battery production is declining, which subsequently affects the price of power battery cells.
4. What has been the impact of the oversupply and decreased raw material prices on battery cell prices?
Battery cells for electric vehicles (EVs) have experienced a decline in prices. In June, the average prices of square ternary cells for EVs decreased by 2.2 percent, and the average prices of square lithium iron phosphate (LFP) cells decreased by 2.6 percent. Soft-pack ternary cells also saw a decline of 1.2 percent.
5. How has the energy storage battery market been affected by these factors?
Energy storage batteries, specifically square LFP cells, witnessed a significant price decrease. The average price of square LFP cells fell by 4.2 percent in June. The decreasing prices of lithium carbonate pose challenges for stable support of energy storage battery prices, resulting in further price declines.
6. Why are battery cell and system vendors resorting to low-pricing strategies?
The intense price competition in the energy storage market has led to prices lower than the cost range of most vendors. Battery cell and system vendors are adopting low-pricing strategies to secure orders, intensifying the competition.
7. What are the future projections for battery cell prices?
TrendForce forecasts that battery cell prices will continue to face downward pressure in the early third quarter. However, there is hope for price stabilization or a rebound during the peak season towards the end of the third quarter when inventory replenishment demand is expected to increase.
Definitions:
– Lithium Carbonate: A lithium compound used in the production of lithium-ion batteries.
– Power Battery Cells: The individual cells that make up a battery pack used for electric vehicles or energy storage.
– Raw Material Prices: The cost of the basic materials used in the manufacturing process.
– Electric Vehicles (EVs): Vehicles that are powered by electricity stored in a battery pack.
– Square Ternary Cells: A type of battery cell using ternary lithium-ion chemistry, typically in a square shape.
– Square Lithium Iron Phosphate (LFP) Cells: A type of battery cell using lithium iron phosphate chemistry, typically in a square shape.
– Soft-Pack Ternary Cells: A type of battery cell using ternary lithium-ion chemistry with a soft-pack design.
– Energy Storage Batteries: Batteries used for storing electrical energy for later use.
Suggested Related Links:
– TrendForce: The website of the market research firm mentioned in the article, providing further insights on the battery industry.
– Battery University: A comprehensive resource on battery technology and knowledge.
– Energy Information Administration: Provides information on global energy markets and trends.