Lithium carbonate prices fall 10.3%, energy storage cells extend decline as market eyes 2027 surplus

Battery-grade lithium carbonate prices are projected to average around RMB 140,000 per tonne in August, down 10.3 per cent month on month, while mainstream high-capacity energy storage cell prices fell 4 per cent in July, according to a new market assessment by InfoLink Consulting.

The firm lowered its 2027 supply-demand outlook for the first time and now expects a slight lithium market surplus.

InfoLink, a global research and market intelligence firm covering the solar, energy storage and renewable energy supply chains, in its latest Energy Storage Supply Chain Price Forecast report, said market attention has shifted from near-term inventory drawdowns to expectations of longer-term supply recovery and a potential surplus in 2027.

The average price of battery-grade lithium carbonate is expected to recover slightly to RMB 145,000 to RMB 150,000 per tonne in September and October, supported by peak season demand and near-term restocking. However, the market is expected to remain slightly oversupplied in 2027, with prices potentially easing to RMB 110,000 to RMB 130,000 per tonne in the first half of the year.

Lithium is a key raw material for batteries, and sustained declines in lithium and cell prices could reduce the cost of battery energy storage systems, potentially improving the economics of renewable energy projects that increasingly rely on storage to manage the intermittency of solar and wind power.

Lower costs continued to push down energy storage cell prices. In July, the tax-inclusive average price of 280-ampere-hour lithium iron phosphate energy storage cells fell 4 per cent month over month to RMB 0.360 per watt hour. Prices of 314 Ah cells also averaged RMB 0.360 per watt hour, down 4 per cent.

The average price of 100 Ah products stood at RMB 0.443 per watt hour, down 2.7 per cent month over month. The price of lithium iron phosphate cathode material for energy storage fell to RMB 52,700 per tonne, bringing the tax-inclusive cost of energy storage cells down to around RMB 0.312 per watt-hour.

The fall in cell prices is significant for the rapidly expanding energy storage sector, where batteries account for a substantial share of overall system costs. Lower battery prices can make it cheaper to pair storage with renewable energy projects, although the final cost of a battery energy storage system also depends on components such as inverters, power conversion systems and other balance of system equipment.

In July, the average free on board price of China’s exports of 280 Ah, 306 Ah and 314 Ah lithium iron phosphate energy storage cells stood at $50.3 per kilowatt hour, $51.0 per kilowatt hour and $50.0 per kilowatt hour, respectively.

Overall price declines were smaller than those in China’s domestic market, InfoLink said. China’s new battery consumption tax policy will impose a 2 per cent consumption tax on lithium-ion batteries from September 1, 2026, rising to 4 per cent from September 1, 2027.

Meanwhile, a combined United States tariff rate of around 40.9 per cent, applicable from late July 2026, can be used as a baseline assumption for estimating the cost of China-origin lithium-ion battery systems for energy storage, according to the report.