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TrendForce Reports Prices of Lithium-Ion Battery Cells Enters a Slow Climb; Supply of Polymer Cells Remains Tight

19 October 2017 Energy / Consumer Electronics Duff Lu

The latest lithium-ion battery market report from EnergyTrend, a division of TrendForce, finds that the price upswing for battery cells has started to moderate since this third quarter. Although the price of cobalt reached a new high for the recent years during the third quarter, prices of battery cells have been climbing more slowly after the large hikes in the second quarter. The overall price increase in the battery cell market is anticipated to be even smaller for this fourth quarter.

By types, polymer cells saw the largest price hike this third quarter with the average increase being more than 3% compared with the prior three-month period. Both cylindrical and prismatic cells saw a smaller sequential price that averaged around 2%. Cylindrical and prismatic cells generally use cathode materials of lower cobalt content (such as NMC), so their prices are less influenced by the dynamics of the cobalt market. As for polymer cells, the upward movement of their prices in the third quarter has not been as sharp as in the second quarter. However, their average price increase was still the largest because of the costs of raw materials.

Notebook market makes greater contribution to the demand growth of polymer cells as brand vendors seek thinner and more efficient batteries

Polymer cells are expanding their presence in the notebook segment of the IT battery market. Duff Lu, senior research manager of EnergyTrend, pointed out that notebook makers have been striving to reduce the body thickness for the majority of their products. While prices of new and thinner notebooks are still too high to get most consumers interested in replacing their older notebooks, brand vendors are very active in incorporating very thin models into their mainstream offerings. This type of notebooks from HP and Dell, for instance, are in high demand. Therefore, notebook brands are starting to use polymer cells for their batteries as to get the best energy intensity performance out of their devices.

“Our market outlook indicates strong demand growth for IT polymer cells in the near future due to increasing adoption by notebook brands,” said Lu. “At the same time, the energy density specifications of notebook batteries are going to become comparable to those of mobile phone batteries.”

Lu also noted that more battery suppliers are shifting the focus of their product development from mobile phones to notebooks as the former application market has become less profitable due to price competition among mobile phone makers. “The shift in suppliers’ focus benefits the notebook battery market, which will see more technologically advanced products,” said Lu. “For suppliers, selling notebook batteries will also contribute to the growth of the average number of battery cells used.”

Generally, more suppliers from China such as BYD are expected to enter the notebook battery market during the first half of 2018, and this could help relieve the strain on the polymer cell supply. According to EnergyTrend, the average number of cells used in notebook battery packs is to remain constant in the second half of 2017. In the tablet segment of the IT battery market, brand vendors have significantly lowered their battery inventories. The average inventory for tablet batteries for this third quarter dropped 8% year on year to 36.2 million units per month. Meanwhile, the falling demand in the tablet battery market will negatively affect the demand for integrated polymer cell batteries.

Supply of high-density batteries for mobile phones tightens as manufacturers are more cautious in raising product specifications

In the market for batteries used in mobile phones, the polymer type’s representation in the total demand is projected to grow from 67% in the second quarter to around 70% in the third quarter. This shows that integrated cell batteries have become the mainstream for mobile phones across regional markets.

One major factor that will influence the development of polymer mobile phone batteries is whether cell suppliers can further raise the battery capacity while maintaining energy density at above the level of 730 watt-hours per kilogram. After the recall of Samsung Galaxy Note 7, cell suppliers have become more cautious in deploying solutions that allow for higher energy density. This heightened awareness of quality and safety has also constrained the overall growth of battery supply for mobile phones. In sum, finding breakthroughs on the energy density front will be key to relieving tight supply for polymer batteries used in mobile phones.

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