A unit of China’s top lithium producer is raising prices for small batteries used by Xiaomi and Oppo.
A unit of China’s leading lithium producer Ganfeng Lithium Co. is raising prices for small batteries used in consumer electronics like headphones that are produced by companies including Xiaomi Corp. and Oppo.
Xinyu Ganfeng Electronics Co. sent a letter to customers on Friday saying prices for new orders would be assessed amid a substantial increase in power cell costs. The Chinese lithium producer confirmed the contents of the letter seen by Bloomberg News; he did not give a size of price increases for his customers.
The company, which makes small lithium polymer batteries for smart wearables and batteries for Bluetooth headphones, cited a “huge rise” in the prices of minerals including lithium carbonate, cobalt oxide and graphite. Anode materials have also been hit by production and power restrictions in Inner Mongolia, he added.
Demand for battery metals has exploded as their use expands from consumer electronics to electric vehicles, just as the global transition away from fossil fuels accelerates. Meanwhile, supply is struggling to catch up amid Covid-related logistical issues and lack of investment from previous years.
High prices have puzzled some manufacturers, as inflated costs could increase pressure on margins and raw material security. Battery makers and the auto industry rushed to lock in raw material supplies.
Battery metal prices hit an inflection point in August and are now returning to monthly increases, according to a BloombergNEF report on Tuesday, adding that global supply chains remain under pressure.