Lithium prices retreat from highs; cell and system prices continue to rise

Note: The ESS biweekly price review will be temporarily suspended on February 20 due to the Lunar New Year holiday.
 

Lithium ore and lithium salt

• Spodumene concentrate (SC6, CIF)

  Price range: USD 1750-1850/MT

  Average price: USD 1800/MT

  Down 7.9% from the previous period

• Battery-grade lithium carbonate (spot)

  Price range: RMB 132,000–142    ,000/MT

  Average price: RMB 137,000/MT

  Down 9.0% from the previous period

On the futures side, lithium carbonate prices peaked at RMB 180,000/MT before coming close to limit-down levels over two consecutive trading sessions on January 30 and February 2, after which the market entered a phase of range-bound consolidation and repair. Overall, inventories have shown a counter-seasonal drawdown since January, while energy storage cell production plans have remained at elevated levels, providing underlying support to fundamentals. However, when lithium salt prices remain above RMB 150,000/MT, profit compression becomes pronounced for energy storage projects and the energy vehicle (EV) value chain, weakening spot market absorption and making futures prices more susceptible to amplified volatility driven by capital flows.

Ahead of the Lunar New Year holiday, a broad pullback across the non-ferrous metals complex, combined with rising risk-off sentiment, led to the withdrawal of short-term profit-taking capital, further intensifying price fluctuations.

On the supply side, Chile’s lithium salt exports rose 76% MoM in January. Combined with the Lunar New Year schedule, this more likely reflects aggregated shipments over January–February, with volumes broadly reasonable. Meanwhile, brine producers within China and projects outside China (such as Sigma’s South American mining operations) are expected to raise supply guidance after the holiday, which is expected to help ease near-term supply–demand tightness.

On the demand side, downstream activity remains broadly in line with seasonal patterns: EV-related production schedules have softened, while energy storage continues to operate at high utilization rates, with pre-holiday inventory restocking largely completed.

Looking ahead, amid a post-holiday environment of rising supply and demand, lithium carbonate prices are expected to remain rangebound in the near term. The price levels will likely be determined primarily by the pace of supply realization and shifts in market sentiment.
 

Energy storage cells in China

Recent price quotes for energy storage cells have maintained their upward momentum. According to the latest data, prices for LFP prismatic cells are as follows:

• 100 Ah: RMB 0.420-0.465/Wh, averaging RMB 0.443/Wh; up RMB 0.013/Wh (2.9%) from the previous period.

• 280 Ah: RMB 0.330-0.390/Wh, averaging RMB 0.360/Wh; up RMB 0.018/Wh (5.1%) from the previous period.

• 314 Ah: RMB 0.330-0.390/Wh, averaging RMB 0.360/Wh; up RMB 0.018/Wh (5.1%) from the previous period.

Despite the recent pullback in lithium carbonate futures, the price anchor for energy storage cells continues to move higher, mainly because leading cell manufacturers have maintained highly saturated production schedules in Q1, resulting in tight delivery availability. Buyers have therefore placed greater priority on delivery certainty, strengthening cells’ near-term bargaining power.

At the same time, there is a lag in the transmission of upstream raw material price fluctuations to the cell segment. Cost pressures stemming from earlier high-priced inputs and recent material price increases are still being absorbed. Based on calculations, the after-tax cost of cells already exceeded RMB 0.31/Wh by late January.

By late January, the highest quoted prices for 314Ah cells in select framework procurement projects surpassed RMB 0.40/Wh, reinforcing market expectations that cell prices are more likely to rise than fall in the near term. As raw material price volatility intensifies, a growing share of medium- and long-term contracts between cell manufacturers and customers now incorporate price-linkage clauses. Looking ahead, whether cell price quotes can ease will hinge on the settlement windows of these linkage clauses, delivery schedules, and the strength of new order inflows, rather than on short-term fluctuations in lithium salt futures alone.
 

Energy storage system (ESS) in China

Winning bid prices for ESS have edge up slightly in China. Prices are as follows, based on the latest data:

• DC-side liquid-cooled containerized ESS (2h): RMB 0.43-0.52/Wh, averaging RMB 0.48/Wh, up 3.3% from the previous period.

• AC-side liquid-cooled containerized ESS (1h): RMB 0.79-0.85/Wh, averaging RMB 0.82/Wh, unchanged from the previous period.

• AC-side liquid-cooled containerized ESS (2h): RMB 0.49-0.60/Wh, averaging RMB 0.55/Wh, up 2.4% from the previous period.

• AC-side liquid-cooled containerized ESS (4h): RMB 0.46-0.52/Wh, averaging RMB 0.49/Wh, unchanged from the previous period.

Recent increases in cell prices have accelerated cost pass-through to the system segment, lifting both system quotes and average winning bid prices. However, overall system-side price increases remain weaker than those in the cell segment: two-hour ESS quotes have edged up modestly, while four-hour ESS continue to face pronounced pressure.

Regionally, Ningxia, Hebei, and Xinjiang stood out in January with notable procurement volumes. Meanwhile, the tendering side continues to tighten constraints on contract performance and operational metrics, raising entry thresholds and strengthening assessment terms. Beyond requirements for commissioning track records, grid-connection compatibility, and safety compliance, greater emphasis is now being placed on warranty duration, availability assessments, response times, spare-parts guarantees, liquidated damages, and maintenance (O&M) services. This has weakened bidding strategies that rely on downgrading specifications or shortening warranties to secure lower prices.

Looking ahead, if elevated cell prices persist, ESS quotes will remain under upward pressure, while the magnitude of any increase will be jointly constrained by project tendering cadence, bidding intensity, and integrators’ capacity to absorb costs and concede margins.

On January 27, 2026, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly issued the Notice on Improving the Capacity Pricing Mechanism on the Generation Side. The policy proposes a category-based refinement of capacity pricing mechanisms for coal-fired power, gas-fired power, pumped hydro storage, and new-type energy storage; it also explicitly establishes a capacity pricing mechanism for grid-side independent new-type energy storage. Capacity price levels will be determined based on factors such as discharge duration and peak-shaving contribution. In addition, the policy calls for the orderly establishment of a generation-side reliable capacity compensation mechanism after the power spot market enters continuous operation, with compensation determined under unified principles such as peak capability, and a gradual expansion of coverage.

This policy’s key significance lies in further institutionalizing revenue streams linked to “capacity contribution.” This enables grid-side and independent energy storage projects to secure more stable income support and clearer accounting frameworks, beyond energy arbitrage and ancillary services. Against a backdrop of electricity price volatility and uncertainty in ancillary service pricing, capacity mechanisms are more conducive to enhancing cash flow stability and financing accessibility. They also incentivize projects to place greater emphasis on hard performance metrics—including availability, response capability, and sustained peak contribution—thereby raising requirements for O&M and full lifecycle performance management.

As China’s renewable energy grid integration continues to expand and system balancing needs accelerate, the further refinement of capacity mechanisms is expected to provide sustained support for new grid-side and independent energy storage installations in 2026, while significantly improving projects’ resilience to revenue volatility and overall bankability.