SHANGHAI, Mar 21 (SMM) - In order to ensure stable supply and price of lithium resource products, and promote the healthy development of new energy vehicles and power batteries, China’s Ministry of Industry and Information Technology (MIIT), together with the Price Department of the National Development and Reform Commission (NDRC), and the Price Supervision, Inspection and Anti-Unfair Competition Bureau of the State Administration of Market Supervision organised a symposium on the operation of the lithium industry and the price increase of upstream materials for power batteries on March 16 and March 17, with key upstream and downstream enterprises in the industry chain attending the meeting.
The meeting required that upstream and downstream enterprises in the industry chain should strengthen the connection between supply and demand, work together to form a long-term and stable strategic cooperative relationship, jointly guide the rational pullback of lithium salt prices, increase efforts to ensure market supply, and better support the healthy development of China's new energy vehicles and other strategic emerging industries.
Affected by the sharp rise in the price of lithium-related products, the cost pressure of power battery companies has increased.
In addition to power batteries, more and more new energy vehicle companies have started a round of price hike. Recently, in response to the increase in the price of upstream raw materials, some car makers, such as Xiaopeng Motors, WM Motor, and Ora Motors have all started a new round of price increases.
Recently, the price increase of lithium salts, such as lithium carbonate, has slowed down. SMM data showed that the average price of domestic battery-grade lithium carbonate stood at 503,000 yuan/mt as of March 21, an increase of 30,000 yuan/mt from early March, but the increase slowed down significantly.
Fundamentals
According to the latest survey by SMM, most lithium salt factories are maintaining high operating rates, while the new production capacity of some producers is still in the ramp-up stage. Output in Qinghai is also picking up with the weather getting warmer. The overall domestic supply of lithium carbonate has increased. SMM expects lithium carbonate production to grow by 26% in March. The import of lithium carbonate will gradually recover from the influence of the overseas Christmas holidays and the Chinese Spring Festival from March to April, which will also help ease the domestic lithium carbonate supply shortages.
On the demand side, NMC material plants were cautious about placing orders due to volatile nickel prices. The price negotiation between LFP plants and battery makers is still in a tug of war. The overall demand for lithium carbonate is expected to increase only 4%.
There have been few transactions in the spot market recently. SMM expects that the price of lithium carbonate may undergo a slight downward correction.
