The scheduling and recovery nodes of the lithium battery industry chain have arrived as scheduled.

In March, the lithium battery industry chain saw a full recovery in production scheduling, with production scheduling in all links increasing month on month. A year-on-year growth of over 20% in 2023, excluding the factors of post holiday resumption of work and production in the industrial chain, indicates a clear signal of industrial chain recovery. On a month on month basis, the overall growth rate of the battery end is about 40%; The material aspect ratio of electrolyte, positive electrode, negative electrode, and diaphragm increased by about 50%; Compared to January, each link is still showing a growth trend.

From the first quarter of 2024 to the present, it appears that thanks to the adjustments throughout 2023, the lithium battery industry chain has entered a "soft landing" stage towards normal development as a whole.

In terms of new energy vehicle terminals, according to data from the China Association of Automobile Manufacturers, the production and sales of new energy vehicles decreased month on month during the Spring Festival in February. However, from January to February, the cumulative sales of new energy vehicles in China increased by 29.4% year-on-year, with a market share of 30%, maintaining stable growth. Correspondingly, the production of lithium batteries from January to February maintained a synchronous growth of 30%.

In addition to stable demand, lithium prices have remained stable at a low level of around 100000 yuan/ton since the beginning of the year. The willingness to replenish inventory at the vehicle end has strengthened, driving the overall production recovery of the lithium battery industry chain.

On the resource side, in February, due to environmental inspections in Jiangxi, the operating rate of lithium salt enterprises in China was relatively low. In addition, there were frequent reports of production cuts and shutdowns in Australian mines, which accelerated the recovery of catalytic lithium carbonate production. In March, the production of lithium carbonate significantly increased.

In terms of price performance, battery grade lithium carbonate is currently fluctuating at the level of 110000 yuan/ton. However, from the perspective of market transactions, this price level is still higher than the buyer's expectations, indicating a clear upward trend in the market. Analysis suggests that the price of lithium carbonate may enter a volatile downward trend in the short term.

Taking the price support of lithium carbonate as a signal, the lithium battery industry chain is forming a clearing rhythm. Relevant analysis indicates that in the process of clearing the industrial chain, the battery and electrolyte links are expected to take the lead in bottoming out.

The battery sector, as the most concentrated segment in the industry chain, has formed an insurmountable gap in profitability between top battery companies and small and medium-sized enterprises. At the price level of 0.3 yuan/Wh for lithium iron batteries and 0.5 yuan/Wh for ternary batteries, small and medium-sized enterprises are facing profit difficulties.

In the electrolyte sector, the industry's clearance performance in 2023 is more evident. While continuously increasing production and enhancing scale advantages in the electrolyte field, some enterprises continue to terminate or suspend projects. Initially, project termination only occurred in small and medium-sized enterprises. As upstream solvent companies entered the electrolyte market and the self-sufficiency rate of top battery companies increased, there was also a phenomenon of project termination under top companies.

On the other hand, the overall lithium battery industry chain is gradually emerging from high voltage and chaos. According to the news, the demand for orders from structural component enterprises has rebounded significantly in recent times, and there has been a resurgence of tight demand that cannot be achieved. In addition, after personnel optimization in various links of the lithium battery industry chain, recruitment has gradually resumed.

Overall, even though the prices of battery cells and materials are still at a low level in the lithium battery industry chain, and the competition among enterprises is "price for quantity" and "continuous internal competition", with the advancement of the clearance process, the supply and demand of the industry chain has gradually retreated towards a healthy and normal direction.

After the normalization of the lithium battery industry chain, a new round of competition will become more intense, and the focus of competition will shift to technological innovation and global strategic layout.