Lithium prices continue to fluctuate as average cell and system prices edge up

Lithium ore and lithium salt

Lithium carbonate prices have recently remained range-bound, with volatility narrowing noticeably from February.

Updates as of March 20:

• Spodumene concentrate (SC6, CIF)

Price range: USD 2,020-2,100/MT

Average price: USD 2,060/MT

Down 1.9% from the previous period

• Battery-grade lithium carbonate (spot)

Price range: RMB 146,000–152,000/MT

Average price: RMB 149,000/MT

Down 2.6% from the previous period

On the supply side, Chile’s lithium salt exports to China continued to exceed expectations in February, while lithium salt output is set to increase further in March, mainly driven by spodumene-based production. However, disruptions on the mining side have yet to ease. Mining permit issues in Jiangxi remain unresolved, and the timeline for Zimbabwe’s export resumption is still unclear. In addition, heightened geopolitical tensions in the Strait of Hormuz may drive up fuel and transportation costs for Australian and African mining operations, further constraining supply elasticity.

As of March, arrivals of spodumene concentrate from Australia and Zimbabwe have continued to decline, while utilization rates at Chinese domestic spodumene-based production lines have increased. Overall, lithium ore remains in a destocking phase, with inventory days at relatively low levels. The tightness on the mining side has not improved.

On the demand side, downstream lithium salt production schedules have remained resilient in March, with strong energy storage demand now broadly anticipated by the market. In contrast, demand from China’s power battery segment continues to be relatively weak, as the recovery in end-market new energy vehicle (NEV) sales has fallen short of expectations at the start of the year.

Notably, early signs of marginal improvement have emerged outside China. Recent data point to a clear recovery in NEV sales in Europe. However, the sustainability of this demand recovery still requires close monitoring.

On the inventory side, market inventories have continued to decline in recent weeks, although the pace of destocking has moderated. This is mainly due to slower import arrivals and the front-loading of downstream restocking.

Overall, the market is currently characterized by strong shipments outside China, delayed import arrivals, ongoing disruptions on the mining side, and increasingly divergent demand dynamics. In the absence of a clear directional catalyst, lithium carbonate prices are likely to continue fluctuating around RMB 150,000/MT in the near term.

Going forward, key factors to monitor include the realization of mining-side disruptions, the pace of end-market demand recovery, and the sustainability of downstream production schedules.
 

Energy storage cells in China

Recently, the transaction price levels for energy storage cells have remained broadly stable, with a slight upward trend.

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; flat from the previous period.

• 280 Ah: RMB 0.335-0.395/Wh, averaging RMB 0.365/Wh; up 1.4% from the previous period.

• 314 Ah: RMB 0.330-0.395/Wh, averaging RMB 0.363/Wh; up 0.7% from the previous period.
  Mainstream newly signed orders are generally concluded at prices above RMB 0.350/Wh.

By format, 280 Ah cells are priced slightly higher than 314 Ah cells, primarily due to relatively tighter available capacity and a narrower range of downstream customers. From a fundamental perspective, current price support for energy storage cells is primarily driven by cost factors. Although lithium salt prices have been fluctuating at elevated levels, cathode material prices remain relatively high. In addition, increased volatility in base metals such as copper and aluminum has prevented a meaningful decline in the cost base for cell manufacturers. In contrast, while demand remains resilient, its marginal contribution to further price hikes has weakened compared to earlier periods.

In March, energy storage cell production lines have generally maintained high utilization rates, with some newly added capacity accelerating ramp-up. However, existing order backlogs and delivery schedules continue to constrain short-term supply, lending strong resilience to current quotes.

Pricing dynamics have shifted from pure price competition toward differentiation in delivery timelines, brand positioning, and contractual terms. Meanwhile, system integrators have shown a marginal increase in their acceptance of elevated cell prices.

Looking ahead, a meaningful easing in cell prices is more likely to materialize only if key upstream materials—such as lithium salts and cathode materials—undergo a substantive correction; this would be reflected through slower price negotiations and contract-linked settlement mechanisms. Prior to that, cell quotes are expected to remain at high levels.
 

Energy storage system (ESS) in China

Recently, energy storage system (ESS) prices in China have edged up slightly, as cost pass-through from earlier increases in cell prices has gradually materialized on the integration side.

Prices are as follows, based on the latest data:

• DC-side liquid-cooled containerized ESS (2h): RMB 0.44-0.52/Wh, averaging RMB 0.48/Wh, up 1.1% from the previous period.

• AC-side liquid-cooled containerized ESS (1h): RMB 0.80-0.86/Wh, averaging RMB 0.83/Wh, up 1.2% from the previous period.

• AC-side liquid-cooled containerized ESS (2h): RMB 0.51-0.62/Wh, averaging RMB 0.57/Wh, up 2.7% from the previous period.

• AC-side liquid-cooled containerized ESS (4h): RMB 0.48-0.53/Wh, averaging RMB 0.50/Wh, up 1.9% from the previous period.

Based on recent project tender results, the pricing midpoint for 4-hour systems has effectively risen to RMB 0.50/Wh and above. For example, in the 290 MW/1,160 MWh co-located energy storage project at Datang’s Zhangjiakou renewable energy base in Hebei, a total of 26 bidders participated, with bid prices quoted at RMB 0.479–0.577/Wh and an average of RMB 0.513/Wh.

Recently, awarded prices for utility-scale 4-hour energy storage integration projects have generally concentrated within RMB 0.50–0.53/Wh, indicating that the price floor for long-duration systems has moved up noticeably compared to earlier periods.

At the same time, tender requirements for system integrators continue to tighten. Evaluation criteria have shifted from a sole focus on the lowest price to a multi-dimensional assessment encompassing pricing, qualifications, execution capability, and operational performance. The core competitiveness of bidders is therefore transitioning from short-term price concessions and configuration downgrades toward comprehensive strengths, including project track record, grid integration capability, safety compliance, product certification, and delivery capability.

Looking ahead, if elevated cell prices persist, ESS price quotes may face further upward pressure. However, the extent of any increase will be constrained by tendering pace, the intensity of price competition, and integrators’ ability to absorb costs.

Since March, geopolitical tensions in the Strait of Hormuz have continued to escalate, with impacts gradually transmitting from initial risk expectations to global shipping, insurance pricing, and energy markets.

According to Reuters, following the intensification of conflict in the Gulf region, war risk insurance premiums for vessels transiting the Strait have surged significantly, with some routes seeing increases of over 1,000%.

In extreme cases, insurers have suspended coverage for certain routes, leaving more than 150 commercial vessels stranded near the Strait. Although some tanker traffic has recently resumed, overall shipping conditions have yet to normalize. On March 19, major European countries and Japan jointly issued a statement pledging to safeguard navigation through the Strait of Hormuz and stabilize global energy markets.

For the energy storage supply chain, the short-term impact of these developments is primarily concentrated on costs and raw material delivery schedules. Elevated shipping risks are expected to directly increase ocean freight and insurance costs for lithium ores, basic chemicals, and auxiliary materials. Meanwhile, shipment schedules for lithium concentrates from Australia and Africa are becoming more vulnerable to disruptions in the global shipping network.

In addition, rising oil and fuel costs are likely to be transmitted indirectly through shipping, lithium refining, and chemical production processes, further influencing upstream raw material pricing.

In summary, if the situation does not materially ease in the near term, elevated cost support for lithium salts and energy storage cells is likely to persist. Over the medium to long term, rising concerns over global energy security are expected to further reinforce the value proposition of energy storage outside China, thereby accelerating demand growth for grid-side applications, particularly in peak-shaving and backup storage.