Cathode prices rise by a third this year as lithium prices hit record highs

Prices for battery cathodes have risen by a third this year and have more than doubled since January 2021 as lithium prices continue to hit new highs, putting upward pressure on battery prices.

The Benchmark Cathode Price Index, which tracks all cathode chemistries, is up 32.4% year-to-date and rose by 4% in November.

The sustained price increases come amid reports that cathode manufacturers are struggling to secure physical supplies of lithium and are turning to the spot market to meet rising demand from battery manufacturers and automakers.

Lithium prices in China rose further last week to touch a record high of RMB 569,000 a tonne ($79,650). Since January, prices of Chinese battery grade lithium hydroxide, which is used in high nickel cathodes, are up 150% year-to-date, while battery-grade lithium carbonate prices are up by 145%.

“The cathode price index’s uptick over the past few months is indicative of rising raw material costs, and will inevitably result in increased cell costs further along in the supply chain,” said Evan Hartley, analyst with Benchmark.

“It isn’t just the rising lithium prices themselves that are impacting cathode pricing, but the fact that with cathode plants failing to receive deliveries of lithium carbonate and hydroxide agreed under long term supply contracts, producers have resorted to the spot market to secure supply, where material availability is tight as well,” said Hartley.

Besides lithium, other key raw material inputs have also increased this year with Chinese nickel sulphate prices up by 3.2% and cobalt sulphate prices by 1.6% in October.

Cathode price data snapshot

NCM (nickel, cobalt, manganese) cathode prices saw increases from late October through to mid-November in the Chinese domestic market, according to data from Benchmark’s Cathode Market Assessment.

Below we highlight the key increases:

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