SHANGHAI, Aug 4 (SMM) –The SMM index of battery-grade lithium carbonate was 271,091 yuan/mt on August 2, a decrease of 3,714 yuan/mt from the previous working day; battery-grade lithium carbonate price range was 263,000-275,000 yuan/mt, a decrease of 5,000 yuan/mt from the previous working day ;industrial-grade lithium carbonate between 248,000-259,000 yuan/mt, a decrease of 5,500 yuan/mt from the previous working day.
1. Cathode material factory:
LFP：According to feedback of preliminary research, the output of LFP in July has declined from that in June, and medium and large enterprises are expected to reduce production, while the output of small enterprises is temporarily stable. The main reason was 1) in June, LFP enterprises made the expectation of power rationing and production reduction in July, so they prepared a small amount of finished product inventory in advance. In July those enterprises were not affected by substantial power cuts, so production was slightly reduced to consume the stock prepared in the previous period. 2) Lithium carbonate, the main raw material, its price was in the process of falling in July. Under the influence of inclination to hold back from purchasing when market prices keep falling, battery cell companies reduced new orders and prioritized destocking. It is expected that the output of LFP may drop slightly in August.
Raw material procurement: In July, LFP enterprises had a relatively high customer supply rate of lithium carbonate. Under the stable delivery of long-term supply, the demand for externally procurement of lithium carbonate decreased. Ternary cathode materials: In terms of ternary cathode materials, the overall market was mainly stable in July. Orders from leading manufacturers increased slightly, and orders from small and medium-sized enterprises mainly in the consumer industry were weak, with a steady decline. In August, major leading manufacturers focused on maintaining stability, while small and medium-sized enterprises saw significant reductions due to weak end market.
2. Battery Cell factory:
Battery Cell output: In July, the overall power battry industry weakened, and the production of battery cell in some factories decreased. The demand in the energy storage industry was stable, and the production of energy storage cells was stable.
End market: the sales volume of new energy vehicles in July fell from June. The demand from EV market weakened. On the energy storage side, the domestic large-scale storage project bidding will continue to increase in the second half of the year, and the market is improving. SMM expects that the demand in energy storage industry in the second half of the year will be released intensively from the end of September to the start of the fourth quarter; new energy vehicles will also embrace the traditional peak season of "Golden September and Silver October". Therefore, considering factors such as the raw material procurement cycle, it is expected that the overall market demand in the start of August will be weak. The recovery time may appear in late August.
Forecast of Lithium carbonate supply and demand : 1. Supply and demand relationship: In August, it is expected that the production schedule of cathode materials will decrease, and the supply of lithium carbonate will increase steadily. In the case of demand reduction, the overall supply and demand structure is expected to show a slight surplus. 2. Price: The price of lithium carbonate is still in a downward trend in the near future. In early August, the upstream and downstream are still in a strong deadlock, with downstream buyers trying to push for lower prices.
