A Glance of China Lithium-ion Battery Materials Week 1, Dec 2022
Source: Mysteel
Dec 07, 2022
Starting in 2023, the NEVs market growth will enter a product-competitiveness-driven era rather than a policy-driven one. We’ve seen a rapid growth of LFP batteries with a market share above 60% of China’s power battery industry, with a market size of over 200 billion yuan.
Mysteel Research & Consulting expects lithium compounds prices to trend down at mid-Dec as the power battery plants' demand is weakened when cathode materials producers keep fence-sitting despite the price drop and interrupted output by the environmental inspection in one major domestic production hub (with about 15 million tonnes of lithium carbonate output expected to be affected), while the production capacity of lithium compounds gradually increases. Cobalt sulfate prices may keep falling upon ample global supply and high traders' inventory levels, although the capacity utilization rate stays low, responding to the weakened demand for ternary batteries used in 3C electronics. Nickel sulfateprices are expected to stay low against sufficient supply and weakened demand for ternary precursors. Ternary cathode materials prices may stay stable, underpinned by lithium compounds prices, when the downstream cell producers cut production. Lithium iron phosphate (LFP) cathode materials prices are also largely affected by lithium carbonate prices with a certain time lag along the industrial chain. The prices may stay stable in the short term before trending down next year along with the lithium compounds. As for the anode materials, the graphitization cost may continue to slip, with newly commenced production capacities that weaken the outsourced graphitization demand from top anode materials producers. Electrolyte prices are expected to stay stable in the short term after raw materials prices drop against ample supply and weakened downstream demand.
Starting in 2023, the NEVs market growth will enter a product-competitiveness-driven era rather than a policy-driven one. We've seen a rapid growth of LFP batteries with a market share above 60% of China's power battery industry, with a market size of over 200 billion yuan. Besides thermal stability, safety, and cost issues, energy density (related to the driving range of EVs) breakthroughs will be key to gaining market share in this new era. We expect in 2024, at the earliest, that LFP batteries will start to lose market share due to their bottleneck of energy density, and LMFP batteries' cost would be 7.8% lower than LFP batteries in 2025, according to Mysteel's in-house analysis.
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