Prices of Lithium-Ion Battery Materials Continue to Fall as Chinese Electric Vehicle Market Slows Down

According to a recent report from TrendForce, a leading research firm, the average market prices for battery-grade lithium carbonate and lithium hydroxide in China both decreased by 9% and 8% respectively in February. The lowest price for battery-grade lithium carbonate has dropped to below RMB 400,000 per ton. Additionally, cobalt products such as cobalt oxide and cobalt sulfate have reached a low point and, although there has been a slight rebound, downstream manufacturers remain cautious about stocking up due to insufficient demand.

Other lithium-ion materials also experienced a synchronous decline in February. For instance, artificial graphite negative electrode materials fell by 8-14%, electrolyte fell by 5-8%, and lithium iron phosphate precursor materials fell by more than 15%.

TrendForce reports that the growth rate of the Chinese electric vehicle market has slowed down, with demand slowly recovering in February after a sales decline in January. It is expected that the sales of electric vehicles in China will increase by around 20% in February. However, due to the slow recovery of demand in the terminal market, companies in the power battery industry chain have been continuously reducing inventory and maintaining a low inventory procurement strategy for raw materials. As a result, the power battery market is currently experiencing oversupply.

In February, the average price of lithium-ion battery cells was further reduced. Specifically, the average price of square three-element cells and iron lithium cells for vehicles decreased by about 3%-4%, and the average price of soft pack three-element power cells decreased by about 4%. Regarding energy storage cells, the average market price of lithium iron phosphate energy storage cells in February fell by 3% to approximately RMB 0.91/Wh. As for consumer battery cells, the market demand has remained weak, and the average price of cobalt lithium cells in February was RMB 9.7/Ah, a decrease of 2% from the previous month.

TrendForce notes that China's leading power battery company, CATL, is currently implementing a "lithium mine rebate" program to reduce battery costs for downstream customers. The company is offering discounted settlements for lithium carbonate at RMB 200,000/ton, while the current average price of lithium carbonate is still over RMB 370,000/ton. Other battery manufacturers in China are also following suit by requesting upstream suppliers to cooperate with price reductions.