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Since May, driven by both cost support and improved supply and demand, the domestic lithium hexafluorophosphate market has shown a upward trend despite being in off-season. According to data from Longzhong Information, as of May 21, the weekly average price of high-purity lithium hexafluorophosphate in the market was 112,500 yuan per ton (the same unit is used hereafter); this represented an increase of 11,500 yuan compared to the previous week, resulting in a weekly increase rate of 11.39%. Industry insiders analyze that currently, downstream demand remains stable, and manufacturers have a strong willingness to raise prices. As a result, the lithium hexafluorophosphate market is expected to continue its upward trend. However, with weakening cost support from raw materials, the overall room for price increases may be limited. In terms of downstream demand, electrolyte products are highly specialized and require a significant degree of customization. The industry generally adopts a make-to-order model; apart from maintaining a small amount of safety stock, companies essentially do not hold any inventory, with products being sold immediately after production. The supply and consumption of electrolyte are roughly equal, which also keeps the overall demand for lithium hexafluorophosphate stable. Last week, the electrolyte production facilities operated smoothly, and demand from downstream markets increased steadily, although the pass-through of price increases at the cost level was relatively slow. On May 21, the prevailing negotiation price for lithium iron phosphate electrolytes was between 26,000 and 32,000 yuan, remaining unchanged from the average price of the previous week. “It is expected that electrolyte manufacturers will continue to adopt a production-based on sales approach in the short term. However, as demand from end-users keeps rising, the operating rate will gradually increase, which will provide some support for the demand for lithium hexafluorophosphate. ”said Jin Peipei, an analyst at Longzhong Information. In terms of supply, following a period of low prices and losses over the past two years that led to industry restructuring, a large number of small- and medium-sized lithium hexafluorophosphate production capacities have gradually exited the market. As a result, the effective supply in the industry has significantly decreased, which is expected to drive up the market price of lithium hexafluorophosphate. However, affected by fluctuations in raw material prices, even with fundamental support, lithium hexafluorophosphate struggles to see significant price increases. In terms of raw materials, lithium carbonate, as the main cost component for lithium hexafluorophosphate, accounts for approximately 40% of the production costs. In early May, driven by multiple factors such as frequent disturbances at mines both domestically and overseas, as well as a rebound in demand for the power battery and energy storage industries, domestic lithium carbonate prices rose. However, by mid-to-late May, as the new production capacity from Australian mines brought about clear long-term increases and shipments from Zimbabwean lithium mines resumed, coupled with limited market tolerance for high prices, the lithium carbonate market began to decline. According to data from Longzhong Information, during the week of May 21, the average weekly price of battery-grade lithium carbonate was approximately 179,000 yuan, a decrease of 17,200 yuan from the previous week, representing a drop of 8.77%. Regarding the future trend of the lithium carbonate market, Wang Feifei, an analyst at Zhuochuang Information and Fubao Lithium Battery, said that it will depend on the pace at which lithium mines in Zimbabwe are shipped to port, the operational status of mines in Jiangxi, and whether demand in June continues its month-on-month recovery trend. “Currently, the demand in the energy storage market is robust. After going through a 3- to 4-month period of inventory reduction, lithium hexafluorophosphate manufacturers are seeing a tightening of the market supply dynamics. With the underlying cost support provided by lithium carbonate, as a raw material, companies are more inclined to raise prices, leading to continuous increases in market offers. It is expected that the lithium hexafluorophosphate market will maintain an upward trend in the short term, but the extent of price increases will ultimately depend on the trends in the lithium carbonate market. ”Teng Hongling, an analyst at BCIA, analyzed that according to market projections, if the price of lithium carbonate remains between 190,000 and 200,000 yuan, the price of lithium hexafluorophosphate is expected to rise to 120,000–130,000 yuan. At present, the price of lithium carbonate has dropped back to 170,000 yuan. Even though manufacturers of lithium hexafluorophosphate are quoting prices at 120,000 yuan, due to low willingness among downstream buyers to make purchases, the actual transaction price is unlikely to reach 120,000 yuan. “At present, inventory buildup of lithium carbonate has largely been completed. Moving forward, price support will weaken. The market remains pessimistic regarding any potential rebound in lithium carbonate prices; it is expected that prices will most likely fluctuate within the range of 170,000 to 190,000 yuan. Taking into account the fundamentals of the raw materials as well as market speculation, it is expected that the prevailing transaction price of lithium hexafluorophosphate in the short term will remain around 110,000 yuan. ”Teng Hongling analyzed.