The increasingly high price of lithium carbonate has showed a prominent decline recently. In July 2016, the
transaction price fluctuated at USD21,806-22,558/t (RMB145,000-150,000/t), 15%+
down from the highest price range of USD26,317-27,069/t (RMB175,000-180,000/t)
in April this year. This reduction is also the steepest fall since the
price hike in H2 2015.
Source: Baidu
As insiders put it, influenced by multiple factors such as subsidy adjustment,
“cheating for subsidy” investigation, enterprise catalogue (meeting power
battery regulation), and gradual capacity release, the tight supply of lithium
carbonate has begun to relieve. A lot more insiders even pointed out that the
price decrease of lithium carbonate has become a tendency and within a short
period it will maintain stability and finally will stay at a reasonable
range.
According to statistics from the China
Association of Automobile Manufacturers (CAAM), in H1 2016, 177,000 alternative
energy vehicles (AEV) were manufactured domestically and 170,000 AEVs sold, up
by 125.0% and 126.9% YoY respectively. It’s worth noting that despite the fact
that AEV sales has increased, the 177,000 figure only accounted for 24% of the
target, at about 700,000, which was set by CAAM. Therefore, to reach the
expected target, there exists huge pressure.
Moreover, the AEV sales in H1 directly impacted the output and shipment of
power battery and further exerted influence on the supply and demand of lithium
carbonate.
Statistics showed that the domestic output of power battery in H1 2016 reached
12.05 GWh, of which the shipment was 9.92 GWh. Influenced by subsidy adjustment
and enterprise catalogue, the domestic output of power battery in Q2 decreased
quarter on quarter, by 40%+.
“The supply and demand relation of lithium carbonate has undergone certain changes,
as the price has already begun to decline,” commented the president of Hefei
Guoxuan High-Tech Power Energy Co., Ltd., “The declining tendency has already
been formed and a reasonable price will arrive, optimistically in Q3 or within
this year.”
“Instead of prominent increase, the shipment of power battery in H1 decreased
and the shipment by the end this year is estimated to be lower than ever
expected. This means that a large number of battery manufacturers won’t get any
orders. In reality, structural overcapacity is now very apparent,” pointed out
by another trade source, "When the lithium carbonate price stays high,
downstream manufacturers generally don’t sign full-year contracts with lithium
carbonate producers, but purchase based on demand.”
Compared to power battery enterprises, cathode materials enterprises may be
more sensitive about the price reduction of lithium carbonate.
Li Jigang, deputy general manager of Tianjin STL Energy Technology Co., Ltd.
pointed out that the price of lithium carbonate has begun to drop and it will
decrease further threatened by the imports of lithium carbonate. Although there
is still room for price reduction, the figure will eventually arrive reasonably
at USD15,039-18,046/t (RMB100,000-120,000/t).
“Recently the price of lithium carbonate has presented a falling tendency and
is expected to stay stable gradually in H2,” stated Beijing Easpring Material
Technology Co., Ltd., “Price hike and slump will not appear like before and a
small extent recovery is most likely to happen. With the continuous release of
new capacity, the price will maintain at a rational range.”
According to analyst CCM, the further
explosive growth of AEV business in H2 2016 will give a spur to the demand for
power battery and raw materials. However, due to the limited new capacities of
lithium carbonate in 2016, there may still be a period with supply and demand
tension, and a reasonable and stable price range will be secured in the future.
Zhang Jiangfeng, secretary general of the Lithium Industry Branch, China
Nonferrous Metals Industry Association commented that, the price of lithium
carbonate has indeed descended recently, but whether the tendency will continue
or not depends on the supply and demand in H2 as well as the enormous influence
from the oversea lithium resources exploration and import.
Having had positive attitude towards the prolonged favorable prospect of AEV
market, domestic key lithium carbonate manufacturers, including Sichuan Tianqi
Lithium Industries, Inc., Jiangxi Ganfeng Lithium Co., Ltd., Tibet Mineral
Development Co., Ltd., Steyr Motors Corp., Jiangxi Special Electric Motor Co.,
Ltd., Qinghai Salt Lake Industry Co., Ltd., and Youngy Co., Ltd., are all
actively promoting the capacity expansion projects.
However, whether such
projects can be successfully put into operation, and weather the demand for
power battery will grow sharply in H2, exert uncertainties on the market supply
and demand of lithium carbonate.
This article comes from China Li-ion Battery E-News 1607, CCM
About CCM:
CCM is the leading market intelligence provider for China’s
agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a
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Tag: lithium battery