【 Dynamic 】 Lithium carbonate prices continue to bottom out, how can power battery recycling companies break through the situation?

【 Dynamic 】 Lithium carbonate prices continue to bottom out, how can power battery recycling companies break through the situation?

Lithium carbonate 'keeps falling'

In June, the prices of industrial grade and battery grade lithium carbonate showed an overall trend of "continuous decline". On June 31st, the average domestic mixed price of industrial grade lithium carbonate was 95552 yuan/ton, a decrease of 7.23% compared to the average price of 103000 yuan/ton on June 1st. On June 31st, the average domestic mixed price of battery grade lithium carbonate was 10188 yuan/ton, a decrease of 8.42% compared to the average price of 109400 yuan/ton on June 1st.

Supply side: The monthly production of lithium carbonate in June was 64868 tons, an increase of 2330 tons from the previous month and a year-on-year increase of 58%; Among them, the production of battery grade lithium carbonate was 41075 tons, an increase of 1070 tons from the previous month and a year-on-year increase of 56%; The production of industrial grade lithium carbonate was 23793 tons, an increase of 1260 tons from the previous month and a year-on-year increase of 61%.

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Demand side: The monthly demand for lithium carbonate in June was 68053 tons, a decrease of 4738 tons from the previous month and an increase of 7.04% year-on-year. The production schedule of battery factories in June is expected to remain basically unchanged compared to the previous month, and large factories will still rely on long-term cooperative customer supply as the main rigid procurement. According to research, the overall production schedule of material factories in July increased slightly compared to June. In terms of the terminal market, according to the preliminary estimate of the China Association of Automobile Manufacturers, the wholesale sales of new energy passenger vehicles in June were 970000 units, a year-on-year increase of 28% and a month on month increase of 8%. The demand for new energy vehicles is about to enter the off-season, and power battery manufacturers are maintaining production cuts and reducing inventory, while maintaining essential procurement of raw materials or delaying delivery. On the cost side: Some top lithium salt companies were in a phase of increasing production in June, and some small and medium-sized mica smelters also received an increase in OEM orders, resulting in a rise in the total production of lithium carbonate on the lithium mica side in June. In terms of salt lakes, most lithium carbonate production enterprises at the salt lake end were in the peak production period in June, and there have been no recent changes in production situation, resulting in a relatively stable output.

Mismatch of supply and demand, price inversion!

With the continuous decline in lithium carbonate prices, the lithium industry is experiencing complex situations and profound contradictions. On the one hand, some production enterprises have developed a reluctance to sell due to the continuous decline in prices and significant compression of profit margins, and have begun to hold back prices and not sell. This behavior not only reduces market supply, but also further exacerbates the wait-and-see sentiment in the market, which is not conducive to price stabilization and recovery. At the same time, this reluctance to sell has also transmitted uncertainty to the midstream and downstream industrial chains, affecting the healthy development of the entire industry.

On the other hand, some companies that use lithium carbonate futures to carry out hedging business are in full production. These enterprises have locked in future procurement costs or sales prices through hedging, effectively avoiding the risk of market price fluctuations and maintaining stable operating conditions in the face of significant price fluctuations. This risk management strategy not only provides protection for enterprises, but also promotes the stable development of the industry.

However, the lithium industry also faces many challenges in terms of recycling. The dilemma of recycling waste batteries mainly lies in two aspects: price inversion and high cost. Due to the fact that the retirement volume of power batteries has not yet reached its peak and the front-end production capacity has rapidly increased, there has been a phenomenon of price inversion between waste battery raw materials and products. This puts significant cost pressure on recycling companies when dealing with waste batteries, and may even lead to operational difficulties. In addition, recycling enterprises also need to continuously improve their technological level, reduce operating costs, improve recycling efficiency and quality, in order to cope with increasingly fierce market competition.

At the policy level, the release of policies such as the EU Battery and Waste Battery Act has put forward higher requirements for the battery recycling industry. Domestic enterprises need to establish a full lifecycle carbon footprint system to cope with international competition, which is both a challenge and an opportunity. By strengthening policy support and market regulation, we can promote technological progress and industrial upgrading in the recycling industry, and promote the sustainable development of the lithium industry.

In summary, the lithium industry is experiencing complex situations and profound contradictions against the backdrop of the continuous decline in lithium carbonate prices. The reluctance of production enterprises to sell, the full production status of hedging enterprises, and the dilemma of the recycling end jointly constitute the complex picture of the current lithium industry. In the future, with the continuous development of industries such as new energy vehicles and energy storage, as well as the continuous improvement of policies and the gradual regulation of the market, the lithium industry is expected to achieve a healthier and more orderly development.