What’s new: As lithium prices continue to hit record highs, the chairman of one large Chinese lithium-ion battery-maker has warned of an approaching supply glut between now and 2024, as a recent capacity build-up looks set to outstrip demand for electric-vehicle (EV) batteries over the next few years.
“The excess in supply could emerge next year,” said Liu Jincheng of Eve Energy Co. Ltd. (300014.SZ), China’s sixth-largest battery supplier, referring to both the batteries and the raw metal input.
Li, who spoke at an industry conference Wednesday, added that the high end of the market would likely be spared from overcapacity problems.
The context: Over the last two years, lithium miners, battery manufacturers and component-makers in China have been rushing to expand production capacity to keep up with the demand created by surging EV sales.
Since 2021, these companies have planned or invested in nearly 10 million tons of production capacity for lithium iron phosphate — a cathode battery material. However, total domestic production capacity is expected to outpace demand by 2025, according to an October report by Gaogong Lithium Battery, an industry think tank.
Gaogong forecast that a glut could emerge next year in the supply of graphite anode material for lithium batteries.
But there’s no sign of a glut yet. Last week, the spot price for battery-grade lithium carbonate climbed to 605,000 yuan ($83,700) a ton, a record high and more than double the price at the beginning of the year.
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Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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