SMM January 8 News:
Electrolyte prices increased this week, with the average prices for ternary (for power use), LFP (for power use), and LMO electrolytes at 37,250 yuan/mt, 35,750 yuan/mt, and 28,750 yuan/mt, respectively. Cost side, due to the limited short-term cost-bearing capacity of downstream battery cell enterprises, cost transmission in the electrolyte industry was hindered. Expectations of weakening future demand also suppressed raw material purchase willingness among electrolyte enterprises. Meanwhile, the previously tight supply-demand pattern for raw materials eased, leading to a pullback in some raw material prices. Although the comprehensive cost of electrolytes decreased, it remained at a high level. Since previous electrolyte pricing was mostly based on the average raw material price from the previous month (M-1), even though some raw material prices have now pulled back, the cost for some orders still exceeds the earlier pricing, providing support for the recent rise in electrolyte prices. Demand side, seasonal factors are expected to lead to an overall weakening in market demand in January, subsequently driving a synchronous decline in electrolyte demand. Supply side, for enterprises lacking self-supplied raw material support, most orders face challenges in achieving full cost transmission. The pressure of continuous losses, combined with demand contraction, is expected to prompt these enterprises to proactively reduce order volumes. In contrast, some enterprises with self-supply capabilities, while also facing pressure from declining downstream demand, leveraged their cost advantages to take on orders that peers found difficult to bear, resulting in relatively small or basically flat production declines. Overall, the industry maintained a supply pace matching demand, ensuring stable market supply. Considering the trends in the supply-demand pattern and cost side, electrolyte prices are expected to remain relatively stable in the short term.
SMM New Energy Research Team
Cong Wang 021-51666838
Rui Ma 021-51595780
Disheng Feng 021-51666714
Yanlin Lü 021-20707875
Zhicheng Zhou 021-51666711
Mengqi Xu 021-20707868
Xuejie Hu 021-20707858
Bolin Chen 021-51666836
Yizhou Wang 021-51595909
