TrendForce’s research reveals that the power battery market is currently experiencing a slump in supply and demand, primarily due to sluggish downstream demand. In August, China’s power battery sector saw a notable decline in pricing, with the average price dropping to less than 0.6 yuan per watt-hour. Furthermore, the automotive square ternary battery, lithium iron battery, and soft-package ternary power segments all witnessed a substantial 10% decrease in prices, bringing them down to 0.65 yuan per watt-hour, 0.59 yuan per watt-hour, and 0.70 yuan per watt-hour, respectively. It is evident that the power battery market is struggling to gain traction in terms of demand.
Regarding energy storage batteries, the August market demand fell below expectations. Simultaneously, the slowing production pace of battery manufacturers, influenced by weakened overseas market demand, has contributed to an ongoing drop in energy storage battery prices. In fact, the average price dipped below 0.6 yuan per watt-hour in August. Currently, China’s energy storage battery production capacity is in a state of oversupply, making it difficult to avoid a price war. It is projected that battery prices will continue their gradual descent throughout the year.
Turning to consumer electronic batteries, August witnessed weak demand in the consumer electronics market, prompting manufacturers to focus on depleting their inventories. According to TrendForce, the prices of lithium salt and cobalt tetraoxide have remained stable, and battery manufacturers exhibit minimal interest in stockpiling these materials. Instead, they are primarily maintaining steady production levels. Consequently, the price of lithium cobalt batteries is expected to continue its downward trend in September.
TrendForce holds that the power and energy storage markets are facing weak demand, causing lithium salt prices to persistently decline. In August, the average price of battery-grade lithium carbonate plummeted by 20% to around 230,000 yuan per ton. Currently, the price of battery-grade lithium carbonate is still on a downward trajectory, and it is foreseen that it will dip below 200,000 yuan per ton. This is likely to make buyers more cautious, leading them to adopt a wait-and-see approach in anticipation of further price drops. However, as lithium salt suppliers have proactively reduced production, TrendForce predicts that lithium salt prices will halt their decline and stabilize in September.
In a broader context, the sluggish growth in demand within the power battery market has prompted lithium salt suppliers to commence production adjustments. The market is eagerly awaiting the upcoming peak season of demand, expected to span from September to October. It is anticipated that lithium prices will cease their decline and find stability in September. Furthermore, increased demand for power batteries is anticipated as the industry chain seeks to replenish its inventories. In summary, there is an overall expectation of a shift towards a positive balance in the supply and demand of power batteries in September, which should help improve the market situation. However, it’s crucial to note that if the demand during the peak season falls short of expectations, the likelihood of a lithium price rebound will be diminished.
