Battery cell prices still decline in August
The market for metals essential to battery production, namely metals such as nickel, cobalt and lithium, was not only weak in August, but the prices of these raw materials continued to fall, according to TrendForce research. These analysts point out that the price of lithium spodumene concentrate dropped sharply in August—seeing a 16% quarterly decline—while some lithium concentrate prices fell below US$800/ton.
Following a drop in the price of battery-grade lithium carbonate below CNY 90,000/ton in July, a new historic low was set in August with the price falling below CNY 80,000/ton. According to TrendForce, the continued drop in cobalt and nickel salts also triggered declines in prices for cathodes, electrolytes, and other battery components.
TrendForce's research also shows that battery cell prices also continued to fall in August due to reduced LiB material costs. What follows:
- EV cell prices fell 4% m/m,
- the average price of square LFP cells fell below CNY 0.4/Wh,
- square three-component EV cells averaged CNY 0.46/Wh,
- three-component EV cells averaged CNY 0.48/Wh.
TrendForce also notes that demand for grid-scale ESS battery cells, in turn, continued to improve in August, driving a steady increase in orders for 314 Ah. The trend toward higher-capacity energy storage cells, meanwhile, remains unchanged, with prices continuing to fall. ASPs for LFP energy storage cells fell to around CNY 0.35/Wh in August - a 6% monthly decline, TrendForce points out.
In late August, on the other hand, lithium carbonate prices reached their lowest level, but after this decline, they began to stabilize. At the same time, although the oversupply of lithium carbonate continues to put pressure on the Chinese market, the effects of upstream production cuts are gradually becoming apparent.
"After a period of inventory reductions throughout the supply chain, demand is expected to improve as the traditional peak season (September-October) arrives, resulting in increased downstream storage activity. This could lead to a short-term and small rebound in lithium salt prices. However, in the longer term, the oversupply of lithium is unlikely to reverse, and the long-term trend in lithium carbonate prices will remain downward" - reports TrendForce.
However, analysts point out that cathode and battery cell manufacturers are adjusting their production plans upward as downstream demand shows signs of recovery. Meanwhile, China's NEV sector continues to face trade risks related to tariffs in foreign markets such as the US, Canada and Europe. For example, the United States initially planned to impose 100% tariffs on Chinese-made EVs starting August 1, but the measure has been postponed again.
At the same time, according to Trend Force, Canada is planning to follow suit with similar 100% tariffs on Chinese-made EVs, set to go into effect on October 1. TrendForce believes that given the uncertainty surrounding international tariff policy, battery manufacturers may begin to stockpile as lithium prices approach their lowest levels. The industry may see a short-term improvement in demand in September.
