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Lithium Carbonate Price Plunge: Opportunities and Challenges for the Energy Storage Sector

On March 20, the price of battery-grade lithium carbonate dropped to $43,950 per ton. Since late February, when the price fell below $60,000 per ton, it has taken only three weeks for the price to dip below $45,000 per ton again.

This rapid downward trend in lithium carbonate prices since the beginning of 2023 raises questions about its impact on the energy storage industry in 2023. There are two main views in the market: first, with the fast decline in lithium carbonate prices, some project owners are waiting for prices to reach $30,000 per ton, which has temporarily slowed down the bidding process for energy storage projects. Second, the significant drop in lithium carbonate prices could bring major benefits to the energy storage industry in 2023, potentially increasing the gross profit margin for downstream businesses.

Some project owners are waiting for the $30,000 per ton price point. High lithium prices were once considered a barrier to the development of new energy storage. The recent sharp drop in lithium carbonate prices is seen as good news for the energy storage industry.

The price of battery-grade lithium carbonate reached a peak of $90,000 per ton in mid-November 2022 and fell to $60,000 per ton by the end of February 2023. In roughly 100 days, the average daily decrease was about $300 per ton. However, since the end of February, when the price fell below $60,000 tons, it took only 20 days for the price to drop below $45,000 per ton, with an average daily decrease of nearly $750 per ton.

This decline rate has exceeded most market predictions and is heading towards a price of $30,000 per ton. Some analysts believe this price point could be reached in the second quarter of this year.

The price of lithium carbonate is likely to drop in the first half of the year and stabilize at around $37,500 per ton in the second half, due to increased recycling and the capacity expansions at new mines.

Some energy storage users are waiting for lithium carbonate prices to reach $30,000 per ton before starting bidding for projects, especially those that will not connect to the grid until the end of the year.

Although some major battery cell manufacturers have closed some production lines, overall energy storage demand remains strong.

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