The prices of lithium carbonate and energy storage cells are experiencing shifts and projections in 2024, impacting global markets.
In China, battery-grade lithium carbonate prices have significantly decreased, hitting RMB 130,000/MT by November-end, signifying a 20.5% drop from the previous month. Concurrently, the prices for Chinese lithium spodumene concentrate (SC6) plummeted by 23.9% to USD 1,530/MT during the same period. The oversupply of lithium carbonate is expected to persist in the short term due to sluggish end-user demand and increased supply from both domestic and overseas sources. This surplus will likely keep prices low until a resurgence in demand occurs, with industry inventories nearly depleted.
Looking ahead, the influx of lepidolite from China and spodumene from Africa in the next couple of years is anticipated to not only impact the lithium market’s supply and demand but also reshape the cost dynamics. Forecasts suggest that Chinese lepidolite and African spodumene could contribute to over one-third of production growth in 2024–2025, influencing the marginal cost of lithium carbonate production.
Factoring in environmental considerations like tailings and lithium slag management, the estimated cash cost of producing lithium carbonate from Chinese lepidolite averages around RMB 78,000/MT. Similarly, African lithium projects focusing on spodumene production in Zimbabwe and Mali, in collaboration with Chinese smelters, anticipate an average cash cost of RMB 79,000/MT. Projections hint that by 2024, lithium carbonate prices may reach RMB 113,000/MT, and spodumene prices could touch USD 1,300/MT, considering supply-demand dynamics, production costs, and inflationary impacts.
Shifting to the energy storage cell market, the rate of decline for LFP energy storage cells in China slowed in November. Prices for 280 Ah and 100 Ah LFP energy storage cells experienced decreases of 11.5% and 13% respectively, by the end of the month.
The substantial price gap of 30% between 280 Ah and 100 Ah LFP energy storage cells narrowed by the end of November, nearly equalizing. According to data from InfoLink’s Global Lithium-Ion Battery Supply Chain Database, the direct material cost for 280 Ah LFP energy storage cells stands around RMB 0.325/Wh, with total production costs varying between RMB 0.42-0.50/Wh among manufacturers. Such slim profit margins have placed strain on Tier-2 and Tier-3 cell manufacturers, prompting expectations of another price war in December despite a temporary stabilization in mid-November due to cost pressures.
These market shifts indicate an evolving landscape for lithium-related products and energy storage cells, setting the stage for potential fluctuations and challenges in the near future.
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