[SMM Analysis] 2024 Electrolyte Market Review

I. Price Review

In 2024, electrolyte prices hit a historical low.

Q1: Electrolyte prices remained stable with a slight increase, influenced by fluctuations in the lithium carbonate market. The price of LiPF6 began to rise at the end of March, causing slight fluctuations in electrolyte prices, which showed a mild upward trend overall.

Q2: Electrolyte prices remained stable compared to Q1. From April to May, although LiPF6 prices showed a downward trend, the limited decline kept electrolyte prices stable. By June, as LiPF6 prices continued to drop, battery cell manufacturers adopted price suppression strategies during negotiations with electrolyte producers, leading to a decline in electrolyte prices.

Q3: Electrolyte prices declined. In July, influenced by lithium carbonate prices, LiPF6 prices continued to decrease, driving electrolyte prices lower. From August to September, LiPF6 prices further declined, coupled with limited growth in end-use demand. The price suppression trend from battery cell manufacturers on upstream suppliers remained difficult to alleviate, resulting in continued declines in electrolyte prices.

Q4: Electrolyte prices slightly increased. In October, after the dual holidays, raw material prices rose slightly, and LiPF6 prices increased marginally. Meanwhile, downstream demand began to recover, supporting prices at relatively high levels. However, due to limited upward momentum, overall electrolyte prices remained stable. By November, with rising lithium carbonate prices and further increases in downstream demand, LiPF6 prices continued to rise. However, the prices of solvents and additives remained largely stable, leading to a slight increase in electrolyte prices. Entering December, raw material prices stabilized overall, while downstream demand began to pull back, reducing electrolyte purchases and resulting in purchasing as needed, keeping electrolyte prices stable.

II. Production Review

In 2024, China's electrolyte production reached 1.41 million mt, up 34% YoY.

Due to the continuous capacity expansion and production increase by small and medium-sized enterprises over the past year, they entered the market with lower prices, intensifying market competition. This led to a slight decline in the market share of top-tier enterprises. However, the top five structure of the electrolyte market did not undergo significant changes.

III. 2025 Outlook

Demand side, China remains the main driving force in the power and ESS sectors. In the power market, the Central Political Bureau held a meeting on December 9, indicating that the policy environment will remain favorable through 2025, supporting the healthy and sustainable development of the automotive industry. Additionally, as 2025 marks the final year of the 14th Five-Year Plan, it is expected to further boost consumer car purchase demand. Therefore, SMM anticipates an optimistic outlook for car sales in 2025. Meanwhile, supported by policies, the ESS market is also expected to achieve significant progress.

Supply side, in 2024, electrolyte prices remained at low levels for most of the year, with the market in a surplus state. Thus, looking ahead to 2025, the market is expected to adopt a cautious approach toward overall industry output. Domestic electrolyte production is anticipated to align closely with downstream demand, with a growth rate of approximately 15%.

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