According to the latest research by TrendForce, lithium carbonate prices may continue to decline in June due to the fact that the raw materials of the downstream battery end are mainly destocked, the demand side of lithium salt is weak, and the overall shipment of lithium carbonate is not smooth.
According to market monitoring data, lithium prices fell sharply around the world in June 2024, with some key indicators even falling to their lowest levels in 35 months. This change is not accidental, but an inevitable consequence of the imbalance between supply and demand in the market. On the one hand, with the continuous progress of lithium mining technology and the gradual release of production capacity, the global supply of lithium resources has increased significantly; On the other hand, although the electric vehicle market continues to grow, its growth rate has not fully absorbed the excess capacity of lithium. In addition, the development of the energy storage market is still in its infancy, and the demand for lithium has not yet formed an effective support. Therefore, under the combined effect of supply and demand, lithium prices have fallen off a cliff.
The collapse of lithium prices has had a direct impact on the downstream industrial chain, of which the price of battery cells has borne the brunt. As the core component of the battery, the cost of battery cells is directly affected by the price of raw materials such as lithium. As lithium prices continue to fall, battery manufacturing costs continue to decrease, which should theoretically bring room for battery cell prices to fall. However, the reality is not so simple. As the battery cell market is also facing the problem of overcapacity, major manufacturers have to adopt a low-price strategy in order to compete for market share. This price war not only intensifies the competition in the market, but also puts the price of battery cells under pressure for a long time.
Figure: Lithium prices hit a new low in June for the year
Despite the downward pressure on prices, the competition of major manufacturers in 300Ah+ large-capacity battery cell products has not stopped. It is expected that from the second quarter of 2024, mainstream manufacturers will achieve mass production of 300Ah+ battery cells, which is expected to further reduce battery costs. However, in the short term, downward pressure on battery cell prices still exists, and it is expected that battery cell prices will continue to face downward pressure at the beginning of the third quarter, and the price stabilization or rebound may need to rely on the replenishment demand in the peak season at the end of the third quarter.
In the face of the dual challenges of plummeting lithium prices and pressure on battery cell prices, the key for enterprises in the industry is how to grasp market trends, strengthen technological innovation and cost control, and respond to market changes.
First of all, enterprises need to pay close attention to market dynamics and adjust production plans and sales strategies in a timely manner. In the context of low lithium prices, companies can reduce production costs by optimizing supply chain management and reducing procurement costs. At the same time, it can also enhance market competitiveness by developing new products, improving product quality and service levels.
Second, enterprises need to strengthen technological innovation and R&D investment. With the continuous development of the new energy vehicle and energy storage market, the requirements for battery performance are also getting higher and higher. Therefore, companies need to continuously invest in R&D resources to improve key indicators such as energy density, cycle life, and safety of batteries to meet market demand.
