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Chinese headset battery supplier to Xiaomi, Oppo raises prices

A unit of China’s largest lithium producer raises prices for small batteries used by Xiaomi and Oppo.

Part of China’s largest lithium producer Ganfeng Lithium Co. raises prices for small batteries used in consumer electronics, such as headphones, produced by companies like Xiaomi Corp. and Oppo.

Xinyu Ganfeng Electronics Co. issued a letter to customers on Friday saying that prices for new orders will be reviewed amid a significant rise in the cost of energy cells. The Chinese lithium producer confirmed the contents of the letter seen by Bloomberg News; it gave no amount of price increases to its customers.

The company, which makes small polymer lithium batteries for smart wearables and Bluetooth headset batteries, called a “massive rise” in the prices of minerals, including lithium carbonate, cobalt oxide and graphite. Anode materials were also affected by production and electricity restrictions in Inner Mongolia, it added.

The demand for battery metals has skyrocketed as their use expands from consumer electronics to electric vehicles, just as the global transition from fossil fuels is accelerating. Meanwhile, the offering is struggling to catch up amid Covid-related logistical issues and lack of investment from previous years.

The high prices have made some manufacturers nervous, as too high costs could put pressure on margins and the safety of raw materials. Battery manufacturers and the automotive industry are rushing to secure the supply of raw materials.

Battery metal prices reached an inflection point in August and are now returning to month-over-month gains, according to a BloombergNEF report Tuesday, adding that global supply chains remain under pressure.

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