TrendForce reports that EV battery prices in Chinese markets continued to decline throughout June, though the rate of decline across all product types has started to taper off. The ASP (CNY) of EV square ternary cells, LFP cells, and pouch ternary power cells in June each fell by 1¬–2% MoM, settling at 0.74/Wh, 0.65/Wh, and 0.78/Wh, respectively. A decrease in upstream material costs was observed to be the primary factor behind falling cell prices. In terms of demand, the market for EV batteries gradually stabilized in June, recovering to levels last seen in 4Q22.
Market demand for energy storage cells has rebounded significantly—especially in overseas markets. Chinese suppliers received a substantial amount of large-scale orders from buyers during 1H23, and 2H23 is set to be primarily focused on product delivery. Meanwhile, as lithium prices gradually recovered in China, market demand for energy storage cells rose concurrently. Consequently, ASP of energy storage cells in June grew by 3%—reaching 0.67/Wh. Demand in the energy storage market is predicted to regain stability in 2H23, with enterprise orders outpacing expectations. However, market competition is expected to intensify, leading to potential disparities in market orders. Whether suppliers can strategize and expand their market presence overseas will be pivotal to their growth.
The consumer electronics market demonstrated satisfactory demand for consumer cells in June. Concurrently, raw materials such as cobalt and lithium experienced price surges, leading suppliers to adopt more aggressive pricing strategies. This resulted in increased cost pressures for LCO cells, which in turn decelerated the downward trend of battery prices. The ASP of LCO cells fell 1.8% in June, hitting 7.42/Ah. At present, the upward trend in lithium salt prices has begun to stabilize, with even a slight decrease being observed as of late. However, it remains to be seen whether growing demand from the consumer electronics market can effectively bolster LCO cell prices in July. Current expectations are that prices in July will not easily rise.
TrendForce observes that lithium prices began to stabilize in June, hinting at a gradual return to normalcy. The global supply of lithium is anticipated to reach 1.2 million tons LCE in 2023—marking a 40% annual growth rate; demand is projected to be approximately 1.11 million tons LCE—representing an annual growth rate of 26%. Significant growth in lithium mineral production is predicted this year for a number of regions, including Africa, Australia, China, and South America, forecasting a gradual return to equilibrium in the supply-demand balance.
A worldwide fervor for discovering new lithium deposits continues to persist, and new lithium mining projects are constantly being put into production. Bolivia—boasting the world’s richest reserves of lithium—remains unexploited industrially. However, in recent years, companies such as CATL and CITIC Guoan have announced cooperative agreements with local Bolivian governments to develop these lithium reserves, aiming to achieve an annual production capacity of 100,000 tons of lithium salts by 2025.
TrendForce predicts that the global supply of lithium mines will only continue to grow, and in the long run, the supply of lithium ore will become increasingly diversified and decentralized. This shift should help reduce market supply risk, but it is also crucial to monitor potential risks posed by changes in local government policies on lithium mining investment and lithium export.