Battery-Grade Lithium Carbonate Falls 6.07% Amid Weak Demand and Inventory Overhang
Beijing, China – April 2025 – Prices for key lithium-ion battery materials continued to trend lower in China last month, reflecting softening demand and high inventories across the battery supply chain. Market data show a marked month-on-month (MoM) decline in both industrial and battery-grade lithium carbonate.
Key Price Points – April 2025
- Lithium Carbonate (Industrial Grade):
USD 9,515.85/tonne (RMB 68,300/t), down 5.44% MoM - Lithium Carbonate (Battery Grade):
USD 9,766.63/tonne (RMB 70,100/t), down 6.07% MoM
These price drops mirror broader trends in China’s EV and energy storage markets, where manufacturers are scaling back procurement in response to a temporary plateau in demand and anticipated policy transitions in mid-2025.
Market Drivers
The pricing pressure stems from multiple factors:
- Inventory buildup by major cathode producers in Q1
- Weak spot demand from EV OEMs and battery cell producers
- High lithium salt output in Yichun and Qinghai
- Export slowdowns amid global economic uncertainty
Chinese lithium refiners are adjusting output rates as a result, with smaller converters reportedly suspending operations to mitigate losses.
Industry Outlook
Analysts expect moderate pricing volatility to persist through Q2, with downside risks tied to:
- Global EV subsidy changes
- Overcapacity in LFP and NCM cathode production
- Delays in new gigafactory launches
However, longer-term fundamentals remain bullish, especially for high-nickel cathodes and solid-state battery initiatives.
Impact of Delays in new gigafactory launches:
1. Downstream Demand Weakening
China is the world’s largest producer and exporter of battery-grade lithium, nickel, cobalt, and graphite. If domestic or overseas gigafactories (e.g., in Europe or North America) delay operations:
- Battery raw material orders drop
- Cathode/anode producers reduce procurement
- Prices of upstream materials—like lithium carbonate—face downward pressure
This effect is currently evident, as noted in April 2025’s price drops.
2. Capacity Planning Disruption
Many Chinese suppliers, including firms in provinces like Jiangxi and Qinghai, scale up production ahead of expected overseas demand. If gigafactory timelines slip:
- Overcapacity builds up in China
- Margins shrink for midstream players (e.g., cathode & electrolyte firms)
3. Export Forecasts Miss Targets
Delayed launches of facilities like those in Germany (CATL) or Indonesia (BYD’s partners) mean:
- Export volumes of battery materials from China decline temporarily
- Customs-cleared volumes in Q2/Q3 may miss forecasts from Q1 planning
4. Policy & Investment Sentiment
Gigafactory delays—especially in international projects involving Chinese firms—affect:
- Investor sentiment toward battery-related equities
- Confidence in policy-driven expansion timelines, both at home and abroad
