The average spot price of LiPF6 in 2024 has dropped by over 50% YoY, and the industry's first corporate performance forecast has been released!

SMM January 16 News: As one of the star products of 2022, LiPF6 once enjoyed a period of glory. However, with lithium carbonate entering a downward trajectory and frequent production cuts or suspensions by high-cost producers in 2023, LiPF6 has long lost its former brilliance. In 2024, LiPF6 is still expected to show a YoY decline. According to SMM historical quotes, the average spot price of LiPF6 in 2024 dropped by over 50% YoY compared to 2023. Under such circumstances, some companies have seen their profitability shrink due to the price decline of LiPF6... SMM has compiled the price fluctuations of LiPF6 in 2024 as follows:

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According to SMM historical quotes, the spot price of LiPF6 has generally shown a downward trend since 2024, with occasional price increases in Q1 and Q4. Specifically, from late February to March, the price of LiPF6 rose significantly from 65,000 yuan/mt to a yearly high of 72,000 yuan/mt. This was mainly due to the rising costs of lithium carbonate and lithium fluoride, which provided strong cost support, as well as the gradual recovery in demand after the Chinese New Year. In March 2024, lithium carbonate prices peaked at around 112,500 yuan/mt, and the sharp cost increase significantly boosted LiPF6 prices. During this period, downstream lithium battery companies showed robust demand, with strong stockpiling sentiment, leading to a notable increase in the operating rate and production of LiPF6 enterprises.

However, starting from mid-to-late April, as lithium carbonate prices continued to decline, cost support weakened. Coupled with the gradual saturation of downstream stocking demand and the release of production capacity by producers, the market gradually shifted towards an oversupply situation, and LiPF6 prices entered a downward trajectory.

From May to August, lithium carbonate prices continued to decline due to slowing downstream demand growth and persistent oversupply. As a key raw material for LiPF6, the falling price of lithium carbonate further dragged down LiPF6 prices. Additionally, the continuous release of new LiPF6 capacity and some companies' strategies to expand market share exacerbated the oversupply situation, causing prices to continue falling. By August 16, 2024, the price of LiPF6 hit a yearly low of 53,750 yuan/mt.

However, since September, the downward trend has shown signs of reversal. In September, the lithium carbonate market was significantly impacted by substantial production cuts by leading lithium chemical plants in Jiangxi, which affected downstream supply. Combined with the continuous increase in downstream production schedules and widespread pre-holiday stockpiling ahead of the National Day, the decline in spot prices slowed, accompanied by fluctuating rebounds. The rebound in lithium carbonate prices prompted LiPF6 producers to adjust their prices, leading to a rise in LiPF6 prices.

In October, although lithium carbonate prices fluctuated downward after the National Day holiday, LiPF6 prices were not significantly affected. According to an SMM survey, at the beginning of October, LiPF6 prices slightly increased due to high lithium fluoride prices. Although lithium fluoride prices began to decline in mid-October, LiPF6 sellers maintained a strong sentiment to stand firm on quotes, keeping prices relatively stable. By month-end, influenced by rising prices of anhydrous hydrogen fluoride and phosphorus pentachloride, LiPF6 prices slightly increased, resulting in an overall upward trend in October.

In November, the rising prices of raw materials such as lithium carbonate and lithium fluoride, combined with the strong sentiment to stand firm on quotes among LiPF6 producers, led to a significant rebound in LiPF6 prices. Additionally, downstream demand remained robust, with continuous growth in demand for LiPF6 from the electrolyte sector. The operating rate in the industry also increased accordingly, and the supply-demand balance improved. Some LiPF6 producers reached full-capacity production to meet downstream demand. Against this backdrop of supply-demand balance and rising upstream raw material prices, LiPF6 prices surged significantly, with a 6.7% increase in November.

In December, although lithium carbonate prices, one of the raw materials for LiPF6, began to pull back, lithium fluoride prices remained high, providing cost support for LiPF6. Additionally, downstream demand remained robust, driving increased demand for LiPF6. As a result, the spot price of LiPF6 continued to rise MoM in December. By December 31, 2024, the spot price of LiPF6 had risen to 62,000–64,000 yuan/mt, with an average price of 63,000 yuan/mt, down 4,000 yuan/mt from the year-end price of 67,000 yuan/mt in 2023, representing an annual decline of 6.35%.

Although the annual decline in LiPF6 prices was not significant, on a YoY basis, the average spot price of LiPF6 in 2023 was 128,300 yuan/mt, while the average price in 2024 was approximately 62,500 yuan/mt, marking a YoY decline of 51.29%. Therefore, for LiPF6 companies, the significant YoY price drop in 2024 inevitably weighed on their performance.

Recently, Shenzhen Sunxing released its 2024 performance forecast. According to the announcement, the company expects a net profit loss attributable to shareholders of publicly listed firms to range from 330 million yuan to 250 million yuan in 2024, representing an increased loss of 109 million yuan to 189 million yuan compared to the same period last year.

Regarding the reasons for the expected performance loss, Shenzhen Sunxing stated that it was mainly due to the continued decline in LiPF6 product prices and weaker-than-expected downstream demand, resulting in an operating loss of approximately 120 million yuan. Additionally, the company recorded impairment losses of approximately 136 million yuan on related production equipment, construction in progress, and inventory for LiPF6 in 2024. Due to factors such as delayed payments from downstream customers and expanded sales scale, as well as consecutive losses, the company also increased its provision for credit impairment losses by approximately 23 million yuan and reversed deferred tax assets by approximately 10 million yuan during the period.

Regarding the company's LiPF6 capacity, Shenzhen Sunxing previously responded on its investor interaction platform that the quality of its LiPF6 products is stable, enabling it to provide high-quality LiPF6 products to downstream electrolyte plants on a long-term basis. The current capacity is 13,300 mt/year.

As for the leading enterprise DFD, although it has not yet released its 2024 performance forecast, its performance in the first three quarters of 2024, as disclosed in its quarterly report, was also affected by the low prices of LiPF6. Data shows that in the first three quarters of 2024, the company achieved a total revenue of 6.876 billion yuan, down 21.73% YoY, with a net profit attributable to shareholders of publicly listed firms of 25 million yuan.

At that time, the company stated that intensified industry competition and price fluctuations of upstream raw materials had impacted the prices of some products and the profitability of industry players, which were at cyclical lows. However, the ongoing market clearing in the industry has shown clear signs of bottoming out. From a long-term perspective, the market share of NEVs continues to grow, and demand for lithium battery materials remains robust. Under this industry landscape, companies with larger production and sales scales and stronger cost control capabilities will have a competitive edge in the market, with market share gradually concentrating in leading enterprises, further enhancing industry concentration.

Will LiPF6 see a turnaround in 2025? SMM will soon release the 2025 LiPF6 outlook details. Stay tuned!