As the price of lithium carbonate has continued to fall this year, the price of lithium battery materials has dropped in an all-round way, and the price of the most powerful battery link has also loosened to a certain extent. However, three months ago, this link was still in short supply, and it was normal for downstream manufacturers to line up to get goods at that time.
Price reduction has become the main theme of the lithium battery sector since the beginning of the year, and the price reduction of upstream lithium carbonate was as close to 24%, which is enough to restructure the profit distribution of the entire lithium battery industry chain. From the perspective of the industry, as the price transmission effect gradually emerges, the profitability of battery manufacturers is expected to be restored.
1. The price is negotiable and energy storage cells supply has reversed
Professionals said that the power storage cells have recently loosened. From the perspective of the entire market, according to market tracking data, from the second week of February, the price of square cells for power storage is about 0.895 RMB/Wh, which has dropped by about 5.6% from the beginning of the year. The quotation of home energy storage square batteries is stable at 0.925 RMB/Wh, a decrease of 4.3% from the beginning of the year. Three months ago, the supply of energy storage cells was a different story.
A person from the downstream of the energy storage industry said that basically it takes three months to wait from placing an order to supplying goods, and during the entire negotiation process, "the delivery date and price are not compromised." It is enough to see that battery manufacturers had a strong position in the entire supply chain at that time. It is worth mentioning that the price of lithium carbonate was at an all-time high at that time. However, what really reversed the supply situation of energy storage cells was the continuous drop in raw material prices.
The price of lithium carbonate, which was once surging, will show a decline in 2023. According to relevant data, the price of battery-grade lithium carbonate fell by 2,000 RMB/ton on February 13, with an average price of 453,000 RMB/ton. Compared with the price of about 520,000 RMB/ton at the beginning of this year, it has fallen by more than 12%, and compared with the historical high of about 600,000 RMB/ton in mid-November 2022, it has fallen by more than 24%.
2. Lithium battery material price reduction
Driven by the decline in the price of lithium carbonate, the prices of downstream cathode materials, anode materials, and electrolytes have all been reduced. Data show that in the field of cathode materials, due to the decrease in orders and the drop in the price of lithium carbonate, the price of battery-grade lithium iron phosphate has dropped by more than 10%, and the price of medium-high nickel ternary materials has dropped by about 3%. In the field of anode materials, new graphitization production capacity has been put into operation intensively, and graphitization processing costs have gradually declined under loose supply and demand.
Some anode materials also offer a 5% price drop. The same situation also occurred in the electrolyte link. The recent price of lithium hexafluorophosphate dropped to 200,000/ton, which was 20% lower than that in December, and the electrolyte dropped by about 4%-7%. With the price reduction of materials in the upstream link across the board, this trend is transmitted to the lithium battery link. Leading lithium battery companies in the world, including CATL, are also considering price cuts. In addition, BYD's massive expansion in the field of energy storage has also greatly increased the supply of this link.
It should be noted that BYD's expansion in the energy storage segment is not limited to the battery segment, but participates in industry competition with an integrated strategy in the entire energy storage track. The data shows that BYD will ship 14GWh of energy storage batteries globally in 2022, while its energy storage systems will ship 12.1GWh globally. However, it should be pointed out that compared with the 24% drop in the price of lithium carbonate and the 10% drop in the price of lithium iron phosphate cathode materials, the price drop of energy storage cells is relatively moderate.
Experts said that lithium battery materials have a certain lag from the price drop of raw materials to price transmission. Generally, there is a time difference of 2-3 months, and the negotiation process also needs a certain period of time. Recently, the price of upstream raw materials for lithium batteries continues to decline, and the price reduction of electrolyte, copper foil, diaphragm and other links is superimposed. The overall cost of the battery is expected to continue to decline, and the profitability of the battery link is expected to gradually increase.
3. It is expected to drive downstream energy storage installations
According to the latest research statistics, China's energy storage lithium battery shipments will reach 130GWh in 2022, a year-on-year growth rate of 170%. From the perspective of the application of shipped products, power storage is still the largest application field, accounting for more than 70%. The battery cell is the main material, accounting for about 70% of the total cost of the energy storage system. At present, the pattern of energy storage batteries is relatively concentrated, and CATL's shipments rank first, and its market share in 2021 is about 27.1%.
Among the energy storage lithium battery companies, the shipments of BYD, GOTION HIGH-TECH, and EVE maintained rapid growth, with market shares of 8.1%, 8.1%, and 3.2% respectively. From the perspective of the industry, the sharp price cuts in the upstream lithium carbonate link have improved the profit margins of battery cell manufacturers, and they can also have more room for autonomy in battery cell prices. From another perspective, the fall in the price of batteries, the main raw material, will be conducive to the construction of emerging power systems, thereby stimulating the demand for energy storage installations.
In fact, it is not only the variable of lithium battery materials that drives the demand for energy storage installations, the recent drop in the price of photovoltaic silicon materials has also become a stimulating factor. The superimposed influence of lithium batteries and photovoltaic raw materials is expected to maintain the rapid growth of energy storage installed capacity. It is estimated that the global energy storage lithium battery shipments will reach about 330GWh in 2023, more than doubling the growth. It is estimated that the demand for the energy storage industry will reach about 270GWh in 2023, and the industry will basically maintain a tight balance.