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Battery companies suffer from two extrusions positive and negative prices are still strong
In the face of pressure on the main engine plant, the automobile industry has cut prices, forcing the entire supply chain to share the burden. Battery companies are caught in a double squeeze, leading to declining profit margins. Meanwhile, raw material prices—such as lithium, cobalt, and nickel—have surged, adding more strain on upstream manufacturers who are also struggling to maintain profitability.
Despite these challenges, seven key lithium battery suppliers reported net profits exceeding 100 million yuan in the first three quarters of the year. Tianqi Lithium led with an impressive 1.52 billion yuan in net profit, while Yihua Group recorded 165 million yuan. Among the top performers, Tianqi Lithium, Huayou Cobalt, and Yanfeng Lithium each posted over 1 billion yuan in net profit, while Shanshan, Glimme, and Hanrui saw more modest gains.
Year-on-year growth in net profit varied significantly. Huayou Cobalt led with an astonishing 9723.35% increase, followed closely by Hanrui Cobalt and Yufeng Lithium. This growth reflects strong demand for cathode materials, especially in the new energy vehicle sector.
The positive market environment was driven by rising sales of electric vehicles and government policies encouraging adoption. As a result, the demand for raw materials like cobalt and lithium spiked, pushing prices higher. The ternary cathode material is gaining ground against lithium iron phosphate, capturing more market share.
In Q3 2017, domestic triple-positive capacity reached 90,000 tons, with output at 24,500 tons—a 15% increase. In contrast, lithium iron phosphate production dropped by 7%. Prices for cathode materials also rose sharply, with Sanyuan Materials reaching 200,000 yuan per ton and lithium iron phosphate at 95,000 yuan per ton.
The negative electrode market also experienced price increases due to rising demand for graphite. Environmental inspections and limited graphitization capacity further tightened supply. Artificial graphite prices jumped 30% in Q3 to 55,000 yuan per ton, while natural graphite rose 9% to 35,000 yuan per ton.
Market concentration in the negative electrode sector remains high. Long-Term Lithium leads artificial graphite with 11% market share, while Shanshangufen holds the second position. For natural graphite, BTR maintains a dominant 57% share.
Overall, tight upstream supply and surging downstream demand have kept raw material prices elevated, boosting the profitability of material companies. With continued growth in electric vehicle sales and the rise of ternary batteries, cobalt and lithium prices are expected to remain strong.
From January to August 2017, new energy vehicle sales reached 320,000 units, up 30.2% year-on-year. The annual target of 700,000 units is still within reach, and as battery production expands, the demand for raw materials will only grow. This trend will likely strengthen the competitive edge and profitability of material suppliers in the coming months.