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China’s average price of lithium carbonate, a key material for producing power batteries, hit 219,000 yuan per tonne on April 4, slumping 56.4% from the same period last year, according to data compiled by consultancy Shanghai Metals Market.
That means the sharp decline has erased the gains for the full year of 2022 and the price has returned to the level in early December, 2021.
The latest round of lithium price correction started in November 2021, when lithium carbonate price approached 600,000 yuan per tonne. The decline accelerated in the first quarter of the year as sales of new energy vehicles slowed down and power battery giant CATL offered big discounts to NEV producers.
Although the decline has slowed as upstream producers try to support the price, there is no sign for pick-up in lithium demand in April and lithium prices are expected to decline further, Guotai Junan Securities said in a research note.
The decline in lithium price has exceeded expectations, leading to a strong wait-and-see atmosphere in the market and cautious procurement, and the magnitude of future declines is expected to narrow, Guojin Securities said in a note.