According to TrendForce’s research “Battery Silver Member Report” in 1Q17, after the lithium battery market going through high sales volume of new energy vehicles in 4Q16, booming demand for power batteries also came to an end in 1Q17. For IT applications, price increase continues from 4Q16 to 1Q17. Cylindrical and polymer batteries each see 1-2% of price rise as the capacities are affected by different factors. It’s expected that sellers will mostly be in control of prices in 2Q17.
For supply, Korean brand makers have been aggressively promoting prismatic laptop batteries in order to replace cylindrical batteries. Meanwhile, prismatic batteries used in cellphone application have slowly been switched to laptop application. Panasonic has lowered its prismatic cellphone and laptop battery capacities, transferring most of the capacity to cylindrical power batteries. For demand, the penetration rate for prismatic laptop batteries is indeed increasing year by year, but only two Korean makers are supplying these types of batteries. In order to diverse the risks of battery source, brand penetration rate still grows slowly. Overall, prismatic laptop battery has matured, with specific size requirement for product spec. But there’s no more capacity expansion for prismatic laptop batteries in 2H16. In 1H17, manufacturers will just transfer their prismatic cellphone battery capacities to prismatic laptop battery and increase size/the use of multi-string application. The price gap between prismatic and cylindrical batteries will gradually shrink in 2017. The average price of prismatic batteries is expecting to reach US$ 0.75-0.78/Ah (QoQ: 0~-1.27%) in 1Q17.
The energy density development for cylindrical batteries has stopped. Cylindrical battery makers will focus more on larger size product development to fulfill the need for new vehicle applications. Fewer cylindrical batteries will be used in laptop application, therefore despite the increasing cylindrical battery capacity, more and more cylindrical batteries are now used in power application. Under the circumstances where production line specs are not shared, the crowing out effect will be more obvious in 2H17. Also, the size of cylindrical batteries has changed from standard spec (18650) to diversified spec (20650, 21700). The price of cylindrical batteries used in IT application will thus slowly increase. Since production cost is close to cost itself, prices will continue to increase like last quarter, reaching US$ 0.67-0.76/Ah (QoQ: 0~1.25%). The price uptrend will continue in 2Q17.
Polymer battery is still popular in the cellphone and laptop markets and has also become the mainstream product. Yet, the product stability of high energy density remains the major bottleneck for polymer batteries. After LGC and SDI going through production line security incidents in 1Q17, brand customers have to take some time to find other suppliers, leading to slight tight supply and in turn raises the prices in 1Q17, reaching US$ 1-1.16/Ah (QoQ: 1.75~2.04%).
