June Lithium Prices Hit New Low for the Year; Cell Prices Still Facing Downward Pressure
July 8, 2024 | TrendForceEstimated reading time: 2 minutes
TrendForce reports that June saw a significant drop in lithium prices due to a focus on inventory reduction in the downstream battery sector. Weak demand for lithium salts and sluggish shipments of lithium carbonate—compounded by short-term oversupply—drove lithium carbonate prices to a new low for the year. Prices fell from over CNY 100,000 per ton last month to the range of CNY 90,000 per ton.
Battery costs have fallen in line with declining raw material prices, leading to a sustained decrease in EV battery cell prices. TrendForce’s survey indicates that in June, EV battery cell prices fell by 1-2% compared to May. Monthly ASP for square ternary, square LFP, and pouch ternary EV battery cells were CNY 0.49/Wh, 0.42/Wh, 0.51/Wh, respectively.
In the ESS sector, the mid-year peak in grid-connected installations in China has ended, leading to a decline in ESS cell orders. Additionally, the drop in lithium carbonate prices has not provided stable support for ESS cell prices, resulting in a price decrease. In June, the average price for LFP ESS cells was CNY 0.41/Wh—down 4.2% from May.
TrendForce analysis indicates that competition in ESS cell pricing remains intense, with cell and system makers adopting low-price strategies to secure orders. This has pushed current prices of ESS cells and systems below the cost range for most cells makers and poses a significant challenge to cost control. Major cell makers are now competing in the 300 Ah+ large-capacity cell product segment and by 2Q24, most mainstream suppliers are expected to begin mass production of 300 Ah+ cells, potentially leading to further cost reductions.
TrendForce notes that the lithium battery market experienced a peak season from March to May. However, post-June, demand for raw materials for battery cells has weakened due to sufficient pre-stocking by downstream sectors. Lithium prices are under pressure given current market conditions with relatively loose supply. In July, market demand is expected to remain weak, with lithium prices falling to the sensitive range of CNY 80,000–90,000 per ton. Despite some supply-side contraction, overall supply will still exceed demand as the weak price trend persists.
Consequently, the cost support for EV and ESS cells will continue to weaken and cell prices expected to face downward pressure at the beginning of the third quarter. Stability or a rebound in prices will depend on restocking demand during the peak season at the end of the third quarter.
Suggested Items
Spot Market for Memory Struggles in First Half of 2024; Price Challenges Loom in Second Half
08/30/2024 | TrendForceTrendForce reports that memory module makers have been aggressively increasing their DRAM inventories since 3Q23, with inventory levels rising to 11–17 weeks by 2Q24.
DRAM Industry Revenue Surges 24.8% in 2Q24, Upward Revision of Contract Price Increase for Q3
08/15/2024 | TrendForceTrendForce’s latest findings reveal that the DRAM industry saw a significant revenue increase to US$22.9 billion in the second quarter of 2024—a QoQ growth of 24.8%.
Contract Price Increases Offset Seasonal Slump, Boosting DRAM Q1 Revenue by 5.1%
06/13/2024 | TrendForceTrendForce reveals that the DRAM industry experienced a 5.1% revenue increase in 1Q24 compared to the previous quarter. This growth—reaching US$18.35 billion—was driven by rising contract prices for mainstream products, with the price increase being more significant than in 4Q23. As a result, most companies in the industry continued to see revenue growth.
May EV Battery Demand and Prices Remain Stable, June Prices Likely to Drop
06/07/2024 | TrendForceTrendForce research reveals that after experiencing low capacity utilization in the first quarter, the EV battery industry saw a significant recovery in market demand starting in March.
NAND Flash Industry Revenue Grew 28.1% in 1Q24, Growth Expected to Continue into Q2
05/29/2024 | TrendForceTrendForce reports that adoption of enterprise SSDs by AI servers began in February, which subsequently led to large orders. Additionally, PC and smartphone customers have been increasing their inventory levels to manage rising prices.