Prices of power battery products continued to fall by 3~4% in November, and market demand is expected to pick up in the second quarter of next year.

As terminal demand cooled significantly, the operating rate of the battery industry declined in November , and the prices of lithium, cobalt, and nickel raw materials all fell, causing battery cell prices to decline. In November, the price of electric vehicle battery cells in China (hereinafter all in RMB) fell by approximately 3~4% month-on-month; lithium cobalt oxide battery cells for consumer electronics fell by 2.5% month-on-month; energy storage battery cells still experienced the highest decline, falling 6.8% month-on-month.

TrendForce said that as demand in the power and energy storage markets cools down, battery cell manufacturers have lowered their production capacity utilization rates in order to reduce inventories, resulting in the industry's overall operating rate falling to less than 50%. Some companies are facing fierce market competition. Facing the dilemma of production reduction or suspension due to lack of orders. On the other hand, due to increased shipment pressure, some battery cell suppliers have adopted a low-price selling strategy to increase inventory depletion, and the market has therefore fallen into a price war. Especially when China enters the off-season of the market in November, storage The lowest quotation price of Neng battery cells has dropped to about RMB 0.4/Wh.

In terms of consumer batteries, after the Double Eleven Shopping Festival promotions, terminal demand has turned flat, and the consumer electronics market has entered the off-season for purchasing. As battery manufacturers have sufficient reserves in the early stage, at the same time, the prices of upstream materials such as lithium and cobalt raw materials in November The continued downward trend, especially the price of lithium salt, which fell by more than 10% in November, caused the average price of lithium cobalt oxide batteries to fall by about 2.5% monthly to RMB 6.27/Ah in November, and the decline is expected to continue into December.

TrendForce said that market demand for power and energy storage remained weak in the fourth quarter of this year, battery cell manufacturers' capacity utilization rates continued to decline, corporate inventory adjustments may be delayed, and some companies may also face production suspensions. In the case of sluggish downstream demand, the price of upstream core lithium raw materials is difficult to stop. Even if the supply growth rate slows down, it is still unable to match the slowdown in downstream demand. Therefore, the power battery product market will still be oversupplied in the short term.

Looking forward to 2024, TrendForce believes that demand may continue to be sluggish in the first quarter of next year, and the recovery of demand is expected to be delayed to the second quarter. In contrast, the supply side can accelerate the clearing of production capacity in the battery industry chain that does not have cost advantages during this period (such as production capacity that was invested in the early stage, is lagging behind in terms of energy consumption, production efficiency, etc., or is small in scale, and is in core raw materials) The lack of a complete layout of the links and the reliance on outsourcing of raw materials, resulting in weak cost control capabilities), are expected to slow down the growth of market supply and speed up the return of supply and demand in the power battery product market to normal.