At the turn of the New Year, lithium battery industry chain enterprises began to prepare for the production work in 2024. On the one hand, upstream lithium producers are beginning to negotiate contracts with customers for 2024; On the other hand, downstream battery plants began bidding for raw materials in 2024.
The overall trend is that the lithium battery material market has turned into a buyer's market, and the transaction price has declined sharply from last year, and it is only the supply price for part of next year.
Lithium iron phosphate expansion is coming to an end
According to relevant data, on December 15, the average price of the power type lithium iron phosphate material was 46,500 yuan/ton, slightly down 0.15%; The average price of battery grade iron orthophosphate is 11,115 yuan/ton. At the same time, the global lithium iron phosphate anode production from January to October 2023 was 1.345,900 tons, an increase of 44.48%. As a comparison, the total annual production of lithium iron phosphate positive electrode in 2022 was 1,110,900 tons, an increase of 132.77%.
In 2023, the effective capacity of lithium iron phosphate anode will reach 2.567 million tons, about 2.10 times the global demand. The release of 6-70% of the annual production capacity in 2024 can meet the domestic demand for lithium iron phosphate in the same year.
Obviously, overcapacity is the core reason for the fierce "price war" of lithium iron phosphate materials. At the same time, usually the end of the year to the first quarter of the next year is the traditional off-season of the market, so some lithium iron phosphate enterprises have begun to reduce production and stop production.
Lithium prices will remain low
According to public information statistics, most of the new planned projects of global lithium resources will be put into production in the fourth quarter of 2023, and new projects will continue to increase in 2024. It is estimated that the growth rate of global lithium resources from 2023 to 2026 will reach 45.8%, 61.5%, 34.2% and 13.0% respectively, and the effective production of global lithium resources during the period is expected to reach 1.11 million tons LCE, 1.8 million tons LCE, 2.41 million tons LCE and 2.72 million tons LCE respectively. This is several times more than the 540,000 tons of LCE in 2021.
It is also forecast that global battery demand will grow by 38% next year, down from 53% this year. This means that downstream battery demand will be at a low growth in the next year, and lithium carbonate will fall into a comprehensive surplus in the next two years, and a sharp rebound in lithium prices seems unlikely.
The reason is that, like the low price of lithium iron phosphate materials, the fundamental reason is the contradiction between supply and demand, the downstream consumer demand is weak, and the inventory is rising. Multiple data sources show that this year and next are the stages of large-scale production and release of capacity for lithium projects.
Seek change and development
In fact, since this year, the entire lithium battery industry chain has fully entered the era of overcapacity. According to incomplete statistics, as of now, in the power battery, positive electrode materials, negative electrode materials, electrolyte and lithium separator, the five major industrial chain segments, enterprise capacity planning far exceeds the 2025 third-party research institutions on the market demand forecast upper limit.
In the "winter" of the market, no one is immune. In order to go through a new round of overcapacity cycle, "live" is the primary goal, the company's capital chain security, global layout, operating costs, technological breakthroughs and product power will become the core competitive weights, but also will give birth to a new industrial pattern.
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