Since the beginning of 2021, the market of new energy vehicles and lithium batteries has been booming, and the price of raw materials of lithium batteries has risen rapidly. Among them, cathode materials are the most critical raw materials, including lithium carbonate, lithium hydroxide, etc. At present, the prices of lithium carbonate, lithium hydroxide and electrolyte have increased significantly. Some raw materials have increased by more than 200% compared with the beginning of this year.

Lithium carbonate and lithium hydroxide have broken through the highest prices in history. It is expected that the prices of these raw materials will remain high in Q4 2021.

At present, the price of battery grade lithium carbonate has been close to RMB 190,000/MT. In the past month, the price has increased by more than 50%, and the increase has been as high as 233% compared with the price of about RMB 57,000/MT at the beginning of the year. Now the price of lithium carbonate is rising by about RMB 3,000/MT every day.

In addition to lithium carbonate, the prices of other key raw materials have also increased significantly. The price of battery grade lithium hydroxide is RMB 174,000/MT, an increase of 41% in the past month, and 235% higher than the price of RMB 52,000/MT at the beginning of the year. The current price of electrolyte is RMB 120,000/MT, an increase of more than 14% in the past month, and 150% higher than the price of RMB 48,000/MT at the beginning of the year.

According to the statistics of China Automobile Industry Association, the cumulative output and sales of new energy vehicles in China from January to August of 2021 reached 1.813 million units and 1.799 million units, respectively, an increase of 1.9 times year-on-year. The booming new energy vehicle market has driven the rapid growth of the lithium battery industry chain. In August, China’s power battery output totaled 19.5 GWH, with a year-on-year increase of 161.7% and a month on month increase of 12.3%.

Due to the development prospect, many power battery enterprises, including CATL, BYD and AVIC, have announced new production expansion plans. The planned new production capacity exceeds 1,000 GWH.

The rapid increase in demand for lithium battery and the expectation of production expansion have also exacerbated the supply shortage of raw materials.

The key spodumene mines in the world are mainly in Australia and South America. Since 2020, affected by the pandemic and other factors, the production and expansion plans of lithium mines have been restrained, and the global lithium resources are relatively tight, which also limits the production capacity of lithium carbonate and lithium hydroxide.

At present, the annual capacity of lithium carbonate and lithium hydroxide in China is about 340,000 MT/year and 230,000 MT/year, respectively, but the actual output is lower than the capacity.

Since 2021, while prices have continued to rise, the orders of many raw material manufacturers have been raised significantly and even scheduled for next year.

Source: Chemical 365

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