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Source: Securities Daily

Our reporter Feng Yuyao

Data released by Shanghai Steel Union showed that as of August 2, the price of battery-grade lithium carbonate fell by 1,000 yuan/ton from the last time, with an average price of 79,500 yuan/ton, falling below the 80,000 yuan/ton mark.

As an important raw material for lithium batteries, the price of battery-grade lithium carbonate has gradually stabilized at around 110,000 yuan/ton in April this year after experiencing wide fluctuations in the first quarter. However, since mid-May, the price of battery-grade lithium carbonate has been difficult to stop falling. On June 11, the lowest price of battery-grade lithium carbonate fell below 100,000 yuan/ton. In August, this downward trend continued.

"Judging from the recent supply and demand, there has been no obvious changes on the market supply and demand sides." Mo Ke, chief analyst of Zhenli Research, told the Securities Daily reporter.

"On the demand side, the downstream market's demand for lithium batteries has not decreased, and the demand in the new energy vehicle and energy storage fields has shown an upward trend." Mo Ke said that there has not been much change in the overall demand side, and the overall performance is relatively strong.

According to data released by the China Association of Automobile Manufacturers, in the first half of this year, my country's new energy vehicle production and sales increased by 30.1% and 32% year-on-year respectively, with a market share of 35.2%. According to statistics from the Gaogong Industry Research Institute of Energy Storage (GGII), in the first half of 2024, China's energy storage lithium battery shipments will reach 116GWh, a year-on-year increase of 41%.

"Although the data for July has not been updated yet, it is expected that the changes on the demand side will not be too significant," said Mo Ke.

On the supply side, Moko believes that although some projects in Argentina expanded production in July, it was also within the plan. From this perspective, there has been no unexpected increase in supply in the market. "There has not been much change on the supply and demand side."

Industry insiders said that according to the production scheduling guidance given in advance by some downstream manufacturers, there was no obvious increase in the demand for battery-grade lithium carbonate in August. The market is worried about the "slow peak season" and there is a strong wait-and-see sentiment.

Regarding the price trend in the second half of the year, Yu Xiaoming, senior investment consultant of Jufeng Investment Consulting, told the Securities Daily reporter: "It is expected that the price of battery-grade lithium carbonate will not improve in the short term and may continue to fluctuate at a relatively low price."

"In the second half of the year, the price of lithium carbonate may rebound. According to some downstream customers, the order volume of batteries is still relatively sufficient," Mo Ke told reporters.

Due to the continuous decline in the price of battery-grade lithium carbonate, many lithium battery companies have seen a sharp decline in performance in the first half of the year, and even suffered losses. A listed company said in its semi-annual performance forecast that due to the downward cycle of the lithium industry, the prices of lithium salts and lithium battery products continued to fall. Although the company's product shipments increased year-on-year, its operating performance fell sharply year-on-year.

From the highest price in 2022, which was close to 600,000 yuan/ton, to the current price below 80,000 yuan/ton, the price of battery-grade lithium carbonate has experienced a "roller coaster" fluctuation. Affected by this, the profits of various links in the lithium battery industry chain have also been redistributed. The upstream lithium salt companies have changed from the previous "high profit" to the current "low profit", and are most significantly affected by the price reduction.

The industry believes that as the price of battery-grade lithium carbonate further falls below 80,000 yuan/ton, it means that some lithium salt manufacturers with more lithium mineral resources are also beginning to face the risk of losses.

"The pace of capacity clearance in the industry mainly changes with the decline in the price of battery-grade lithium carbonate." Mo Ke told reporters that as prices fall, capacity clearance in the industry may accelerate.