The cost of lithium, which is an essential component of batteries, is falling at an accelerated rate.
According to My Steel, the price of battery-grade lithium carbonate in China has decreased by RMB 12,500 per ton (or $1,814 per ton) since last Friday. The most recent average price quoted is RMB 312,500 per ton.
The most recent average price is 3.85 percent lower than on Friday, representing the largest drop of the year.
Battery-grade lithium carbonate dropped by 2.4%
The price of battery-grade lithium carbonate fell by RMB 8,000, or 2.4 percent, in China on Friday, marking the previous huge decline of the year.
The price of industrial-grade lithium carbonate dropped today by the same amount, RMB 12,500 per ton, with the current average price being RMB 272,500 per ton. Additionally, its 4.39 percent decline was the highest of any month this year.
On March 16, the average cost of industrial-grade lithium carbonate dropped by RMB 7,000 per ton, bringing it to RMB 295,000 per ton. It marks the first time the price dropped below RMB 300,000 per ton during this downward cycle.
The average price of battery-grade lithium carbonate is hovering above RMB 300,000, but it may drop that mark below within the next day or two.
Lithium prices continue to decline
Lithium carbonate prices had been on an upward trajectory for the previous two years up to November of last year, coinciding with the explosive expansion of China’s new energy vehicle (NEV) industry.
The price of battery-grade lithium carbonate in China increased to RMB 590,000 per ton on November 23, 2022, representing a roughly 14-fold increase from RMB 41,000 per ton in June 2020.
Since then, however, there has been a continuing decline in the price of lithium. On February 22, 2019, the price of industrial-grade lithium carbonate fell below RMB 400,000; on February 28, 2019, the price of battery-grade lithium carbonate also fell below that mark.
Even after a report in local media at the end of February suggested that the production stop in a mining hub in China could potentially disrupt lithium supplies, prices for lithium carbonate continued to fall. It was despite the fact that the report did not stop the falling trend.
The price of lithium carbonate has decreased by approximately 40 percent since the beginning of this year and by roughly 47 percent from its all-time high in November of last year.
Price drops to affect EV manufacturers
CNEVPOST reports that it is anticipated that the recent decline in the price of lithium carbonate will alleviate the cost pressures that electric vehicle manufacturers are experiencing.
NIO had stated in the past that an increase in the company’s gross margin of two percentage points would result from a decrease in the price of lithium carbonate of RMB 100,000 per ton.
During a conference call with analysts after the announcement of NIO’s earnings on March 1, the company’s management stated that they anticipate lithium carbonate prices will drop to RMB 200,000 per ton this year, which will result in an increase in gross margins.
See Also
- Bank of America predicts lithium surplus in 2023 as demand wanes
- Iran claims to have found the world’s second-largest lithium deposit
- EV demand triples Lithium Miner SQM’s profit
- Tesla supplier LG Chem partners with Piedmont Lithium for 200,000 metric tons of spodumene concentrate
- Tesla is reportedly planning to bid for Sigma, boosting the lithium miner’s stocks
