Lithium Batteries and Materials: In June, China’s power battery production reached a total of 60.2 GWh, representing a substantial year-on-year increase of 45.70% and a month-on-month increase of 6.3%. Regarding loading capacity, power battery load amounted to 32.9 GWh, showcasing a notable year-on-year growth of 36% and a month-on-month growth of 16.7%. The production to load ratio stood at 1.83, registering a slight year-on-year increase of 0.3 and a decrease of 0.18 from the previous month. The output of ternary batteries accounted for 17.7 GWh, making up 29.4% of the total output. However, this represents a year-on-year decrease of 3.4% and a month-on-month decrease of 4.9%. On the other hand, the loading capacity of ternary batteries reached 10.1 GWh, comprising 30.6% of the total loaded capacity. This indicates a year-on-year decrease of 13% but a positive month-on-month increase of 12%. The production to loading ratio for ternary batteries was 1.76. LiFePO4 batteries recorded an output of 42.2 GWh, accounting for a substantial 70.2% of the total output. This represents a remarkable year-on-year increase of 84.2% and a month-on-month increase of 11.8%. The loading capacity of lithium iron phosphate batteries reached 22.7 GWh, accounting for 69.1% of the total. This reflects a significant year-on-year increase of 47.5% and a noteworthy month-on-month increase of 18.4%. The production to loading ratio for lithium iron phosphate batteries stood at 1.86.
In the short term, battery prices have stabilized due to cost support. However, we anticipate that in the second half of the year, battery prices will decline as the price of lithium carbonate reduces. According to SMM data, battery-grade lithium carbonate is currently priced at 280,600 yuan per ton, showing a decline of 3.86% from the previous week. This decline follows a rapid rebound in prices, which was primarily driven by following reasons. First, lithium salt manufacturers supported the original price and were reluctant to sell due to the halt in domestic ore production. Additionally, increased customer demand and higher activation rate of the midstream manufacturing link further contributed to the price surge. Presently, there is still a shortage of minerals in the market, resulting in high auction prices for lithium mica and spodumene. Furthermore, the transportation of foreign lithium mines has experienced a time lag, even as their production capacity has started to recover. However, with the resumption of lithium mica mines and the expansion of production in salt lakes during the summer, the lithium carbonate production capacity is expected to improve.
On the demand side, there is a positive outlook for the energy storage market, but the recovery of customer demand for power batteries has been slow. The recent listing of lithium carbonate futures is expected to lead to lithium carbonate prices declining further after its falling below 300,000/ton last week. And the futures market has a significant impact on the spot market prices. Furthermore, an oversupply in production capacity is projected in the second half of the year, contributing to a faster decline in lithium carbonate prices. Eventually, we expect these prices to stabilize within the range of 200,000 to 300,000 yuan per ton.
Upstream bargaining power has weakened, leading downstream new energy vehicle enterprises to pass on more benefits to consumers. This is expected to stimulate a rebound in demand and foster prosperity within the industry. According to SMM data, the excluding tax prices of 523 square ternary and lithium iron phosphate batteries have decreased to 0.619 yuan and 0.56 yuan per Wh this week, representing a decline of 0.027 yuan and 0.0177 yuan per Wh compared to the previous week, respectively. Our calculations indicate that the excluding tax cost of 523 ternary and lithium iron phosphate batteries is about 0.627 yuan and 0.489 yuan per Wh, respectively, showing a decrease of 0.01 yuan and 0.0025 yuan per Wh compared to last week. Additionally, their corresponding excluding tax gross profit now stands at negative 0.008 yuan and 0.025 yuan per Wh, reflecting a decline of 0.0165 and 0.0152 yuan per Wh compared to last week, respectively. With the continued decline in lithium carbonate spot prices, battery prices have experienced a decrease for the first time in two months. We anticipate that there is still room for further decline in the battery price.
This week, the excluding tax price of 523 square ternary positive electrode decreased by 2.36% to 201,800 yuan per ton compared to last week; the excluding tax price of LiFe positive electrode decreased by 1.04% to 84,100 yuan per ton; the excluding tax price of PVDF remained unchanged at 170,400 yuan per ton; the excluding tax price of A00 aluminum foil (including processing fee) decreased by 2.64% to 31,300 yuan per ton; the excluding tax price of electrolytic copper foil (including processing fee) increased by 0.36% to 81,000 yuan per ton; the excluding tax price of negative electrode (artificial graphite) decreased by 0.68% to 32,100 yuan per ton; the excluding tax price of diaphragm (wet coating film) remained unchanged at 1.81 yuan per square meter; the excluding tax price of ternary electrolyte decreased by 3.72% to 45,800 yuan per ton, and the excluding tax price of lithium iron electrolyte decreased by 0.7% to 31,000 yuan per ton, both compared to last week.
