Category: Lithium

Battery-grade lithium carbonate price roars back to RMB 300,000 per ton after 14 days of consecutive gains

The price of battery-grade lithium carbonate has risen 66.67 percent in China and 111.11 percent for industrial-grade lithium carbonate since the rally began late last month.

Battery-grade lithium carbonate price roars back to RMB 300,000 per ton after 14 days of consecutive gains-CnEVPost

Lithium carbonate -- a key raw material for electric vehicle batteries -- has seen prices rise for half a month in China.

The price of battery-grade lithium carbonate reached RMB 300,000 ($42,740) per ton in China today, up RMB 15,000 per ton, or 5.26 percent, from yesterday, the 14th consecutive day of gains, according to Mysteel.

Industrial grade lithium carbonate price today reached RMB 285,000 per ton, up RMB 15,000 per ton, or 5.56 percent, from yesterday, the 17th consecutive day of increases.

This is a rebound in lithium carbonate prices after seeing months of declines, with the Chinese new energy vehicle (NEV) industry suddenly falling into weak growth early in the year.

The price of battery-grade lithium carbonate rose to RMB 590,000 per ton in China on November 23, 2022, up about 14 times from RMB 41,000 per ton in June 2020.

However, factors including weak demand for electric vehicles have caused lithium carbonate prices to decline all the way after heading into 2023.

Prior to April 21, lithium carbonate prices had not seen a single day of gains in China this year, falling about 65 percent since the beginning of the year.

Since the rebound began at the end of last month, battery-grade lithium carbonate prices have risen 66.67 percent in China, and industrial-grade lithium carbonate has risen 111.11 percent.

The rebound in lithium carbonate prices is mainly due to tight supplies, while there has still not been a more significant recovery in demand for NEVs downstream, local media Yicai cited an unnamed industry source as saying in a May 15 report.

China's new energy passenger car retail sales in April were 527,000 units, up 85.6 percent year-on-year but 3.6 percent lower than in March, according to data released by the China Passenger Car Association (CPCA) on May 9.

In some analysts' view, despite the rebound in lithium prices this month, there is still downward pressure in the long run.

Overseas customers will not purchase lithium at prices significantly higher than the Chinese market in the long term, and profit levels for lithium smelters will eventually return to a reasonable range, CICC analyst Feng Tingshuai 's team said in a May 16 research note.

If the rebound in Chinese lithium prices is not strong enough to fully reverse the situation, lithium prices will likely continue to face some downward pressure, the team said.

The accelerating downward trend in lithium carbonate prices is difficult to sustain, and lithium prices are expected to gradually stabilize and possibly even rebound, CICC analyst Zhang Jiaming's team said in an April 20 research note.

However, the team believes the downward trend in lithium prices may not end soon, as the global lithium supply is still in surplus.

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Battery-grade lithium carbonate up RMB 15,000 per ton

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Lithium price rally picking up steam in China

Battery grade lithium carbonate rose 7.61 percent in China today, and industrial grade lithium carbonate rose 13.25 percent, both the largest single-day gains of this year.

Lithium price rally picking up steam in China-CnEVPost

Lithium, a key raw material for batteries, is seeing accelerating price gains after a rally that began late last month.

The average price of battery grade lithium carbonate in China was RMB 247,500 ($35,680) per ton today, up RMB 17,500 per ton, or 7.61 percent, from yesterday, according to data from Mysteel.

Industrial grade lithium carbonate averaged RMB 235,000 per ton today, up RMB 27,500 per ton, or 13.25 percent from yesterday.

This is the 10th consecutive day of increase in battery grade lithium carbonate prices and the 13th consecutive day of increase in industrial grade lithium carbonate prices, and they are both the largest single-day gains of this year, CnEVPost's monitoring shows.

As of April 21, lithium carbonate prices have not seen a single day of gains in China this year, falling about 65 percent since the start of the year.

In this round of increases that began late last month, the price of battery grade lithium carbonate rose 37.5 percent from RMB 180,000 per ton, while industrial grade lithium carbonate rose 74 percent.

High lithium prices are clearly not good for China's electric vehicle (EV) industry, but the continued decline in the price of the raw material also reflects weak consumer demand at the end of the spectrum.

The price of battery grade lithium carbonate rose to RMB 590,000 per ton in China on November 23, 2022, up about 14 times from RMB 41,000 per ton in June 2020.

The significant upward movement in lithium prices has resulted in EV makers facing higher battery costs, which has led to impaired profits.

However, the fall in lithium carbonate prices since the end of last year has raised many people more concerns about weak downstream EV demand and price wars.

As lithium prices rebound, some analysts are beginning to see possible signs of improvement in the EV industry.

Lithium carbonate prices have stopped falling and stabilized, reflecting gradually improving downstream demand, Guotai Junan analyst Shi Yan's team said in a research note on May 11.

On May 10, CITIC Securities analyst Yuan Jiancong's team said that the previous sharp drop in lithium carbonate prices and price cuts by automakers had fueled a wait-and-see mood among new energy vehicle (NEV) consumers.

In the second quarter, demand for NEVs is expected to pick up as lithium carbonate prices stabilize, the team said.

CICC analyst Zhang Jiaming's team said in an April 20 research note that the accelerating downward trend in lithium carbonate prices was unsustainable, and lithium prices may gradually stabilize and possibly even rebound in the short term as inventories are reduced.

Due to oversupply, some companies choose to cut production, which is a normal phenomenon that may occur in the process of price reduction, the team said.

However, the team believes that the downward trend in lithium prices may not come to a complete end soon, as the global lithium supply is still in surplus.

Market forces will bring a concentration of new capacity coming online and create supply growth that outpaces demand growth, which is the main driver of the easing lithium supply and demand crunch, the team said.

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Lithium price in China sees 1st rise this year as analysts expect short-term rebound

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Lithium price in China sees 1st rise this year as analysts expect short-term rebound

Lithium prices are expected to stop falling in the near term, but will continue their downward trend over the next two years, analysts say.

Lithium price in China sees 1st rise this year as analysts expect short-term rebound-CnEVPost

The epic decline in lithium carbonate prices is starting to see signs of stopping.

Industrial-grade lithium carbonate price in China rose RMB 2,500 ($362) per ton today to an average of RMB 137,500 per ton, the first single-day increase this year, according to data from Mysteel.

Battery-grade lithium carbonate, on the other hand, remained at RMB 180,000 per ton for the third consecutive day, according to the data.

With the rapid growth of China's electric vehicle (EV) industry, prices for the key raw material for batteries have risen rapidly in the past two years.

At one point in late November last year, battery-grade lithium carbonate was quoted at RMB 590,000 per ton in China, about 14 times the average price of RMB 41,000 per ton in June 2020.

Since then, lithium carbonate prices have continued their downward spiral, and even a production disruption in Yichun, Jiangxi, nicknamed the "lithium capital of Asia," at the end of February did not stop the downward trend.

Earlier this month, a local media outlet reported that half of Yichun's four major lithium producers had opted to shut down production to stem the downward price trend.

The accelerating downward trend in lithium carbonate prices is unsustainable, with lithium prices expected to gradually stabilize and possibly even rebound in the short term as inventories decrease, said Chinese brokerage CICC analyst Zhang Jiaming's team in an April 20 research note.

Some companies were choosing to cut production due to oversupply, which is a normal phenomenon that would occur during price reductions, the team said.

However, the team believes the downward trend in lithium prices may not end soon, as the global lithium supply is still in surplus.

Market forces will bring a concentration of new capacity coming online and create supply growth that outpaces demand growth, which is the main driver of the easing lithium supply and demand crunch, the team said.

"We expect global lithium resource supply to grow from 760,000 tons to 1,973,000 tons in 2022-2025, with a CAGR of 37 percent," the team wrote.

Separately, CITIC Securities analyst Bai Junfei's team said in an April 17 research note that current lithium prices have fallen near key cost support levels and could stop falling if downstream demand picks up.

Downstream producers have material inventories that are all at extremely low levels, and overseas lithium prices are at a significant premium to Chinese lithium prices, which are also supportive factors, according to the team.

Notably, CITIC Securities shares CICC's view that lithium prices still have room to fall, as the oversupply will continue.

Global new lithium supply will reach 350,000 tons in 2023, and show a trend of quarterly increase, according to CITIC Securities.

In 2023-2025, total global lithium supply will grow to 1.2 million tons, 1.73 million tons and 2.32 million tons, respectively, with year-on-year growth rates of 44 percent, 41 percent and 34 percent, corresponding to a supply surplus of 74,000 tons, 397,000 tons and 438,000 tons, respectively, according to the team.

As the oversupply expands, lithium prices will still have downward pressure in 2024 and 2025, and there is a risk of further price declines after a temporary stop, the team said.

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Analysts explain how falling lithium carbonate prices affect EV costs

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BYD secures preferential prices for lithium battery raw materials in Chile

BYD's project in Chile is designed to produce 50,000 tons of lithium iron phosphate cathode material per year, with an estimated investment of at least $290 million.

(Image credit: CnEVPost)

BYD received preferential prices for lithium carbonate in Chile, where it was awarded a lithium mining contract a year ago in the lithium-rich country.

After an evaluation process that began in November 2022, the Production Development Corporation, Corfo, assigned the status of specialized lithium producer to BYD Chile SpA, the Chilean development agency announced Wednesday.

As a result, BYD Chile SpA will access the preferential price for one of the lithium carbonate quotas available in the corresponding call base, up to 11,244 tons/year of battery grade lithium carbonate (Li2CO3), and a supply contract by SQM Salar SA until the year 2030, for its project BYD Chile Lithium Cathode Plant that will be installed in the Antofagasta Region, according to a statement.

The project is designed to produce 50,000 tons per year of lithium iron phosphate cathode material (LiFePO4) in Chile, using lithium carbonate as a raw material, with an expected investment of at least $290 million.

The project is expected to come into operation in late 2025, and during its investment phase it plans to create 500 jobs, the statement said.

On August 31, 2022, Corfo opened a call for companies to present proposals for the materialization of investment projects that allow the preparation and execution in Chile of lithium value-added products.

On November 7, 2022, the first application entered the call through the permanent application model and was declared admissible on November 22 and began to be evaluated according to the different dimensions and factors described in the basis of the call, the statement said.

This follows the award of one of the five lithium mining contracts to BYD Chile SpA in January last year.

BYD, China's largest maker of new energy vehicles (NEVs), is also one of the largest manufacturers of power batteries.

BYD's power battery installed base in China in March was 7.40 GWh, ranking second with a 26.65 percent share, according to data released earlier this month by the China Automotive Battery Innovation Alliance (CABIA).

's power battery installed base in March was 12.49 GWh, continuing to rank first with a 44.95 percent share.

NIO enters race for lithium with Australian investment

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Some Chinese lithium producers stop production to stem continued price decline

Half of the four major lithium producers in Yichun, Jiangxi province, nicknamed the "lithium capital of Asia," have opted to shut down production, according to local media.

Some Chinese lithium producers stop production to stem continued price decline-CnEVPost

Some producers in a Chinese lithium-producing hub are shutting down production as lithium prices have seen a rare streak of several months of declines this year.

With lithium carbonate prices falling by about RMB 10,000 ($1,450) per ton per day in recent days, half of the four major lithium producers in Yichun, Jiangxi province in eastern China, have opted to shut down production, local media The Paper said today, citing a source from a major producer.

Yichun, nicknamed the "lithium capital of Asia," is one of the world's largest sources of lithium. Notably, the city's lithium production was disrupted in late February by regulators investigating noncompliance.

However, these disruptions did not stop lithium carbonate prices from falling, even though many expected so.

Lithium producers in Yichun, who were forced to shut down production some time ago because of government environmental actions, are now voluntarily choosing to do so in the face of the current market, The Paper cited the source as saying.

There are four main companies with mature production lines and lithium mica mines in Yichun, namely Yongxing New Energy, Jiangxi Special Electric Motor, Feiyu New Energy and Nanshi Lithium, which have a total annual capacity of 105,000 tons, according to the report, which does not mention which two lithium producers have stopped production.

Zhicun Lithium, which was founded in 2021 and also has lithium capacity in Yichun, currently has nearly half of its lithium carbonate production line shut down, the report said, citing a person familiar with the matter.

In 2021, Yichun produced 81,000 tons of lithium carbonate, more than a quarter of China's total lithium carbonate production.

As of July 2022, Yichun's lithium carbonate capacity of 180,000 tons represents 40 percent of China's entire lithium carbonate capacity of 450,000 tons, the report noted.

The RMB 250,000 per ton price of lithium carbonate is seen as break-even point for much of Yichun's production of lithium extracted from mica, according to the report.

At one point in late November last year, battery-grade lithium carbonate was quoted at RMB 590,000 per ton in China, about 14 times the average price of RMB 41,000 per ton in June 2020.

Since then, lithium carbonate prices have continued their downward spiral, and have not seen a single day of gains this year.

Yesterday, battery-grade lithium carbonate prices in China fell RMB 8,500 per ton to an average price of RMB 224,000 per ton, according to Mysteel.

Industrial-grade lithium carbonate fell RMB 6,000 per ton yesterday to an average price of RMB 189,000 per ton.

Today is Tomb Sweeping Day in China and lithium carbonate quotes are not available.

On February 26, Yicai reported that lithium ore processing companies in Yichun have shut down production industry-wide to rectify mining violations.

Yichun produces between 10,000 and 12,000 tons of lithium carbonate each month, and a one-month shutdown would affect about 10 percent of global supply, the report said, citing a lithium battery industry analyst who declined to be named.

That was seen at the time as something that would stop the price of lithium carbonate -- then at about 400,000 yuan per ton -- from falling, but that expectation did not materialize.

The intensity of lithium carbonate's decline did decrease in early March, with daily declines of less than 1 percent from March 3 to March 8, according to data monitored by CnEVPost.

After that, lithium carbonate continued to fall sharply, with the price of battery-grade lithium carbonate and industrial-grade lithium carbonate falling 5.10 percent and 4.88 percent, respectively, on April 3, both the largest single-day declines of the year.

In 2022, the supply and demand for lithium carbonate and lithium hydroxide were actually in balance, and there was a lot of hype behind the price surges, said Wang Yu, chairman of battery maker Farasis Energy, in an interview during the China EV 100 Forum held on April 2.

Based on this situation this year, lithium carbonate prices are expected to fall rapidly, Wang said.

Lithium carbonate prices have already fallen to RMB 250,000 per ton and are expected to fall further, with a drop to below RMB 100,000 very likely, he said.

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Panic selling of lithium carbonate just won't stop

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Lithium carbonate prices likely to fall below RMB 100,000, says chairman of battery maker Farasis Energy

Lithium prices continue to fall in China today, with the average price of industrial-grade lithium carbonate falling below RMB 200,000 per ton for the first time in the current down cycle.

Lithium carbonate prices likely to fall below RMB 100,000, says chairman of battery maker Farasis Energy-CnEVPost

A Chinese battery maker's chairman believes lithium carbonate prices could even fall below RMB 100,000 ($14,530), with the battery raw material not seeing a single day of gains this year.

In 2022, the supply and demand for lithium carbonate and lithium hydroxide were actually in balance, and there was a lot of hype behind the price surge, Farasis Energy's chairman Wang Yu said in an interview during the China EV 100 Forum yesterday, according to Yicai's report.

Based on this situation this year, the price of lithium carbonate is expected to drop rapidly, Wang said.

Lithium carbonate prices have already dropped to RMB 250,000 per ton and are expected to drop further, to below RMB 100,000 is very likely, he said.

Lithium carbonate prices in China continued to fall today, with the average price of industrial-grade lithium carbonate falling below 200,000 yuan per ton for the first time in the current down cycle.

Battery-grade lithium carbonate fell RMB 12,500 per ton today to an average price of RMB 232,500 per ton, while industrial-grade lithium carbonate fell RMB 10,000 per ton to an average price of RMB 195,000 per ton, according to figures from Mysteel monitored by CnEVPost.

Lithium carbonate resources are not in short supply, and the raw material is not very difficult to produce now, and the industry will return to its normal operations, Wang said.

The actual cost of lithium carbonate per ton is around RMB 30,000, and there is no reason for it to go up to RMB 500,000 or 600,000, he said.

The automotive and battery industries contributed at least RMB 100 billion in profits to the lithium industry last year due to rising raw material prices, Wang said.

At one point in late November last year, battery-grade lithium carbonate was quoted at RMB 590,000 per ton in China, about 14 times the average price of RMB 41,000 per ton in June 2020.

Since then, lithium carbonate quotes have continued their downward spiral, and have not seen a single day of gains this year.

The price of lithium carbonate depends on demand and supply, as well as the price sensitivity of car companies, Wang said.

In the past, new energy vehicle (NEV) sales have soared, and car companies have lost a lot of money to complete their performance, he said, adding that for many automakers, they may cut production if raw material prices do not meet expectations this year.

In addition, the mass production of sodium-ion batteries has already caused an impact on the lithium carbonate and lithium hydroxide industries, Wang said.

On February 23, battery maker Hina Battery unveiled three sodium-ion battery cell products and announced a partnership with Anhui Jianghuai Automobile Group Corp (JAC), which made one of its models the first to carry sodium-ion batteries.

Farasis Energy's sodium-ion batteries will also enter mass production this year and will be used in the short term for budget models with a range of up to 300 kilometers and in the medium term for models with a range of up to 500 kilometers, Wang said.

Farasis Energy installed 0.19 GWh of power batteries in China in February, ranking No. 9 with a 0.88 percent share, according to data released last month by the China Automotive Battery Innovation Alliance (CABIA).

Lithium carbonate prices likely to fall below RMB 100,000, says chairman of battery maker Farasis Energy-CnEVPost

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Analysts explain how falling lithium carbonate prices affect EV costs

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Analysts explain how falling lithium carbonate prices affect EV costs

For an EV with a 70-kWh pack, the cost of the battery is now RMB 12,300 - RMB 14,500 lower than when lithium carbonate prices were at their previous high, analysts say.

Analysts explain how falling lithium carbonate prices affect EV costs-CnEVPost

Falling lithium carbonate prices are known to benefit the profitability of electric vehicle (EV) makers. So how will this price change affect the cost of EVs? A new research note provides a good analysis.

An EV powered by a lithium iron phosphate (LFP) battery typically uses 30-40 kilograms of lithium carbonate, while an EV with a ternary lithium battery consumes 50-70 kilograms of the material, said Haitong International Securities analyst Yang Bin's team in a research note today.

When the price of lithium carbonate drops by RMB 100,000 ($14,540) per ton, the cost of ternary lithium batteries and LFP batteries will see marginal decreases of RMB 60 to RMB 70 per kWh, respectively, the team's calculations show.

In this case, the battery cost would be RMB 4,200 to RMB 4,900 lower for an all-electric vehicle with a 70-kWh battery capacity.

This means that the current battery cost of an all-electric vehicle with a 70-kWh battery capacity is already RMB 12,300 - RMB 14,500 lower than when lithium carbonate prices were at their previous high, the team said.

As a backdrop, lithium carbonate prices have never seen a single day of gains in China this year and continue to fall by several thousand RMB today, according to data from Mysteel.

The average price of battery-grade lithium carbonate per ton in China fell by RMB 7,500 to RMB 256,500 today, down about 57 percent from RMB 590,000,000 last November. The average price of industrial grade lithium carbonate per ton also fell by RMB 7,500 to RMB 210,000 today.

Falling battery costs will drive down the overall cost of EVs, which will allow automakers to see their gross margins repair, according to Haitong's research note.

However, the team also noted that in the long run, automakers need to achieve technology upgrades, reduce costs and improve competitiveness in order to capture sufficient market share and profitability, considering EV penetration is already high in China.

With lower lithium carbonate prices, EV makers will have more room for pricing as they gain greater profit margins, the team said, adding that this is expected to allow them to gain greater market share by cutting prices.

Although the price of lithium carbonate has fallen by more than half from its high a few months ago, the team believes there is still room to fall.

In 2022, China's lithium resource supply was 727,000 tons and demand was 796,000 tons, the team said.

In 2023, China's lithium resource supply is expected to reach 1.088 million tons and demand is expected to be 1.034 million tons, according to the team.

With the supply of lithium resources outstripping demand, there is still room for lithium carbonate prices to fall, with the price of battery grade lithium carbonate expected to fall to around RMB 200,000 per ton by the end of 2023, the team said.

($1 = RMB 6.8772)

Panic selling of lithium carbonate just won't stop

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Panic selling of lithium carbonate just won’t stop

Lithium carbonate prices continue to decline, leading to a heavy wait-and-see mood among downstream customers, who are reluctant to place large orders.

 

The price of lithium carbonate has dropped by half from five months ago, with panic selling not stopping.

Battery-grade lithium carbonate prices in China fell RMB 12,500 per ton ($1,818 per ton) today, bringing the average price down to RMB 300,000 per ton, according to Mysteel.

Industrial-grade lithium carbonate also fell by RMB 12,500 per ton today, leaving the average price at RMB 260,000 per ton.

Compared to yesterday's average prices, battery grade lithium carbonate and industrial grade lithium carbonate fell by 4 percent and 4.59 percent respectively, the new biggest drop of the year.

The price of battery-grade lithium carbonate has fallen 49 percent compared to RMB 590,000 per ton on November 21 last year, and the drop this year is about 40 percent.

Lithium carbonate is still being sold off at an accelerated pace, a report in local media Yicai today quoted an unnamed industry source as saying.

The continued decline in lithium carbonate prices has led downstream customers to shy away from placing large orders, with a heavy wait-and-see mood, the source said.

On March 20, a company in northwest China's Qinghai province dropped its sell offer for battery-grade lithium carbonate to RMB 280,000 per ton, and some local battery-grade lithium carbonate ex-factory prices dropped to RMB 250,000 per ton, the report noted.

As lithium prices continue to fall in China, some analysts previously said the drop will not last long as imports become more attractive.

Overseas lithium products have seen a significant premium, which could support prices for lithium products in China, said CITIC Securities in a March 7 research note.

Notably, Yicai's report today said there have been withdrawals of lithium carbonate orders in overseas markets, which has further pushed down the price of lithium carbonate.

A month ago, it was reported that was pushing a lithium rebate program to car companies, with some cells to be settled at RMB 200,000 per ton of lithium carbonate.

CATL acknowledged the plan on March 9, but did not mention the base prices.

CATL's lithium sharing plan was not motivated by a price reduction, but rather that the company already owns some mineral resources and does not want to reap windfall profits, the company said.

CATL's proposed price benchmark of RMB 200,000 per ton for lithium carbonate has further lowered market expectations for the price, accelerating the panicked drop in lithium carbonate prices, Yicai's report today quoted several industry sources as saying.

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Lithium prices see biggest drop this year in China as decline accelerates

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Lithium prices see biggest drop this year in China as decline accelerates

's management previously said they expect lithium carbonate prices to fall back to RMB 200,000 per ton this year, boosting gross margins.

The price of lithium, a key raw material for batteries, is accelerating its decline.

The price of battery-grade lithium carbonate in China today was down RMB 12,500 per ton ($1,814 per ton) from last Friday, with the latest average price quoted at RMB 312,500 per ton, according to My Steel.

That latest average price is down 3.85 percent from Friday, the biggest drop of the year, data monitored by CnEVPost show.

On Friday, the average price of battery-grade lithium carbonate in China fell RMB 8,000, or 2.4 percent, the previous biggest drop of the year.

Industrial-grade lithium carbonate also fell by RMB 12,500 per ton today, with the average price quoted at RMB 272,500 per ton. Its 4.39 percent drop was also the highest of the year.

The average price of industrial-grade lithium carbonate fell RMB 7,000 per ton to RMB 295,000 per ton on March 16, the first time it has fallen below RMB 300,000 per ton in this down cycle.

The average price of battery-grade lithium carbonate is now barely above RMB 300,000 and is at risk of falling below that mark in the next day or two.

In the two years prior to last November, lithium carbonate prices were soaring alongside the rapid growth of China's new energy vehicle (NEV) industry.

On November 23, 2022, the battery-grade lithium carbonate price rose to RMB 590,000 per ton in China, up about 14 times from RMB 41,000 per ton in June 2020.

Since then, however, lithium prices have continued to fall, with industrial-grade lithium carbonate prices falling below RMB 400,000 on February 22 and battery-grade lithium carbonate prices falling below that mark on February 28.

In late February, a local media report that lithium supplies could be disrupted by the production halt in a mining hub in China did not stop lithium carbonate prices from continuing to fall.

As of today, lithium carbonate prices are down about 47 percent from last November's highs and are down about 40 percent so far this year.

The drop in lithium carbonate prices is expected to ease the cost pressures faced by electric vehicle manufacturers.

NIO had previously mentioned that a drop in lithium carbonate price of RMB 100,000 per ton would increase its gross margin by 2 percentage points.

NIO's management said in a conference call with analysts after the March 1 earnings announcement that they expect lithium carbonate prices to fall to RMB 200,000 per ton this year, boosting gross margins.

($1 = RMB 6.8896)

Full text: NIO Q4 earnings call transcript

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CATL to reach new price agreement with automakers as soon as end of Mar, report says

The price of lithium, a raw material for batteries, has accelerated its decline, with industrial-grade lithium carbonate falling RMB 7,500 per ton to RMB 302,500 per ton today.

New price agreements between Chinese power battery giant and some local automakers are expected to be reached this month, at a time when battery raw material prices continue to fall.

CATL's lithium rebate policy is progressing steadily, and it is now at the practical stage of signing agreements with some car companies, local media Cailian said today, citing sources close to the battery maker.

These agreements are expected to be reached by the end of this month at the earliest, the source said.

CATL's plan was first reported on February 17 by local media outlet 36kr, which said it is not aimed at all customers, but rather at several strategic customers, including (NYSE: NIO), (NASDAQ: LI), and .

The core terms of the partnership include that CATL will settle a portion of the price of power battery supply with car companies at a rate of RMB 200,000 ($28,970) per ton of lithium carbonate for the next three years.

At the same time, car companies signing the partnership will be required to commit about 80 percent of their battery purchases to CATL, according to the report.

CATL management first acknowledged the move during the company's earnings call on March 9.

CATL's lithium sharing plan is not for the purpose of lowering prices, but rather the company already has some mineral resources and does not want to reap windfall profits, its management said.

CATL wants to be able to share with long-term strategic customers and is moving forward with communications to that end, the company said.

Prior to that, Li Auto and NIO both said that they had ongoing discussions with CATL when asked about the topic in their respective earnings calls.

CATL's move comes as lithium carbonate has been falling for months.

Today's quotes for industrial-grade lithium carbonate and battery-grade lithium carbonate in China were both down RMB 7,500 per ton, with the latest average prices at RMB302,500 per ton and RMB 340,000 per ton, respectively, according to My Steel.

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CATL confirms it's negotiating new prices with EV makers

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