A downward trend in demand has led to a damper on both supply and demand in the EV battery market, according to a report from the market research firm TrendForce.
The average price drops of EV square ternary cells, LFP cells, and pouch ternary power cells reached 10%, as per the report.
Expectations for robust August demand in the energy storage market fizzled out, exacerbated by weakened overseas demand.
This slowdown has forced the battery manufacturers to press the brakes on production, causing prices of energy storage cells to slide below CNY 0.6/Wh.
With a glut in China’s storage cell production capacity, a clash seems inevitable, with a continued downward spiral in the price expected for the rest of the year.
TrendForce indicated that the ongoing drop in the prices of lithium salts and cobalt [II, III] oxide shows no signs of bottoming out.
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Therefore, manufacturers will focus on liquidating existing inventories and will be hesitant to stock up.
Weak demand in the power and energy storage sectors has put pressure on lithium salt prices, spiraling down to an average of CNY 230,000/ton in August, a 20% decrease quarter-over-quarter.
However, with the suppliers initiating production cutbacks, a potential floor for lithium salt prices to rebound looks possible in September.
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