Lithium carbonate continues to plummet due to changes in supply and demand

The price of lithium carbonate has been declining since early May from over 100000 yuan per ton, 

and has now stabilized in the range of 80000 yuan per ton. 

Zheng Xiaoqiang, a lithium industry analyst at Shanghai Steel Union's New Energy Division, 

told reporters that the momentum for the continued decline in lithium carbonate prices in August has decreased, 

and it is expected to fluctuate narrowly between 77000 yuan/ton and 82000 yuan/ton.

The recent continuous decline in lithium carbonate prices has put pressure on the industry, 

but lithium companies have not slowed down their pace as a result. 

The overall operating rate has not significantly decreased, and new production capacity is also on the way.

Downstream material companies are still maintaining a high customer to supply ratio and stable long-term supply status. 

After completing some external procurement, they are currently in a wait-and-see state. 

However, due to the good order expectations of battery factories from August to October, 

some lithium iron manufacturers have raised their production schedules due to the impact of energy storage orders. 

According to preliminary statistics, lithium iron production in August was 211400 tons, 

an increase of 6.80% compared to the previous month, "Zheng Xiaoqiang pointed out.

The latest research shows that the overall demand for power batteries remained stable in July. 

However, due to the continuous decline in the prices of positive electrode materials, 

the prices of battery metals such as cobalt, nickel, and copper have also dropped, especially the significant drop in copper prices,

 resulting in a continuous decrease in the cost of battery materials, leading to a slight decline in battery cell prices.

In July, the price of power cells slightly decreased by 2% compared to the previous month. 

The monthly average prices of square ternary, square lithium iron, and soft pack ternary power cells were RMB 0.48/Wh, 0.41/Wh, and 0.50/Wh, respectively.

In July, the lithium iron phosphate energy storage battery industry experienced fierce competition at low prices, 

with an average price of about 0.38 yuan/Wh, a decrease of 9% compared to the previous month. 

At the end of July, the price of lithium carbonate had fallen to around 80000 yuan per ton, and the pattern of oversupply remained unchanged. 

It is expected that the price of lithium carbonate will continue to fluctuate and explore the bottom in the third quarter

Against the backdrop of the strong rise of new energy, as a national strategic resource, 

every round of drastic fluctuations in lithium prices almost triggers a storm of market attention and controversy.

Looking back at the evolution of lithium prices over the past decade, it has gone through multiple cycles of bull and bear, 

each of which has had a profound impact on the industrial landscape. 

The reason for this is almost always caused by drastic changes in the supply and demand relationship, 

that is, once the market supply and demand relationship changes, prices will definitely react quickly in reality, which is the power of cycles.

As is well known, the supply and demand structure of the lithium industry has undergone fundamental changes since 2023. 

Specifically, while funds have entered the upstream to accelerate the release of production capacity, 

downstream demand has not grown synchronously, resulting in the entire lithium battery industry chain being in a state of overcapacity. 

As a result, the industry's internal competition has intensified, and the new energy industry is facing a brutal reshuffle. 

Therefore, the almost unanimous expectation has led to the market having no resistance to the decline in lithium prices. 

The short-term market fluctuations of lithium prices are almost unpredictable, but the long-term trend still depends on changes in supply and demand.