Battery cathode prices rise for first time this year as lithium costs increase

The price of all types of battery cathode materials rose in June for the first time this year following an uptick in demand and increases in raw material feedstock costs, according to Benchmark’s Cathode Price Assessment.

The Benchmark Cathode Price Index, which tracks all cathode active material chemistries, increased by 14.6% from a month earlier.

The increase in cathode prices was driven primarily by a rebound in prices for lithium and cobalt within China after months of declines.

The cathode price index is still down 45.4% on a year-to-date basis.

Buyers of cathodes for consumer electronics also stocked up ahead of the Chinese 618 shopping festival which lasts from late May until mid-June and is a key metric for China’s consumer spending and economic health.

Prices for LCO cathode material increased 18.7% month-on-month to an average of RMB 270,000 per tonne, according to Benchmark.

Cathodes make up over 40% of the cost of lithium ion battery cells and a rebound in demand and prices could imply higher manufacturing costs further along in the supply chain as well.

Still, the overall market recovery remains limited as producers wait for clear signs of recovery following a slowdown in China’s economic growth.

Lithium, cobalt prices rebound

The most notable reason for the increase in prices across cathode chemistries is the recent rebound in lithium prices.

Benchmark’s battery grade lithium hydroxide (EXW China) price ticked upwards 32.1% in the period 17 May – 14 June.

For Chinese cobalt sulphate, Benchmark’s cobalt sulphate (EXW China) price rose 14.8% between 15 May – 15 June. The increase comes even as the wider cobalt market is expected to remain in a supply surplus of 17,000 tonnes this year.

Lithium makes up around 30% of the costs of lithium ion battery cells while cobalt is a key constituent of nickel cobalt manganese cathode chemistry.

After a weak start to the year, China’s electric vehicle is showing signs of recovery. The country’s largest EV producer BYD sold 128,196 battery electric vehicles in June, an increase of 84% year-on-year and 7.2% month-on-month.

LFP cathodes lead price increase

The price of lithium iron phosphate (LFP) cathodes reported the largest increase with prices in China rising 19.9% month-on-month to an average of RMB 87,500 per tonne ($12,210).

The LFP cell production accounted for 67% of Chinese production in May, reaching 37.8 GWh.

The demand was led by the growing activity within the ESS market, contacts told Benchmark. Though LFP price increases continue to be limited due to competition among cathode producers to gain market share.

NCM prices

Prices for the nickel based cathode chemistries too saw a rebound as demand increased steadily, led by low to mid nickel cathode grades where prices for NCM622 in China increased 11% month-on-month to an average of RMB 227,500 per tonne.

Prices also increased for the high nickel cathode grades, with NCA and NCM811 prices rising 9.1% and 12.9% month-on-month respectively to an average of RMB 300,000 a tonne ($41,867) and RMB 285,000 per tonne ($39,774).

Overall China’s NCM production rose 5.7% in May to 18.6 GWh.

According to Benchmark, rising demand is expected to continue into the third quarter and producers are forecasting an increased production in response.

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