Sharp price rises and supply shortages for non-active materials used in lithium ion cells are adding pressure to battery manufacturers already facing a rise in battery raw material prices, according to the most recent analysis by Benchmark Mineral Intelligence.

Prices for binder and separator materials, and solvents, began trending upwards in late-2020 and have since seen sustained higher prices and constrained supply, with expansions limited to smaller Chinese operations.

The supply of the binder material polyvinylidene fluoride (PVDF) has been particularly constrained and prices have risen significantly since mid-Q2 2021.

Traditionally, these price rises would not substantially affect cell cost reductions, but manufacturers now need to pay close attention to the bill of materials which plays a greater role than ever in total production costs, Benchmark said.

While cell makers face pricing pressure from these peripheral materials, critical raw material prices have increased considerably since late 2020, with Benchmark’s Lithium Carbonate Index up 111.6%, nickel sulphate prices (EXW China) up 25.6%, and cobalt hydroxide prices up 64.2% year-to-date in July 2021.