[SMM Analysis] Weak Ternary Cathode Demand Suppresses Price Pass-Through

This week, ternary cathode material prices edged slightly higher. From the raw material perspective, nickel sulfate, cobalt sulfate, and manganese sulfate prices remained largely stable; lithium carbonate prices posted gains, while lithium hydroxide prices saw modest declines. Overall, ternary cathode manufacturers' quotations showed limited changes compared to the previous week.

Looking ahead at raw material price trends, nickel, cobalt, and lithium all face tightness expectations on the supply side, providing some upward support. However, current ternary market demand recovery has fallen short of expectations, with downstream buyers showing weak purchasing intent and low acceptance of payable adjustments. Consequently, the magnitude of subsequent raw material price increases is expected to be relatively limited, and the room for cathode payable increases remains constrained.

In terms of transactions, raw material prices remained relatively stable this week, leading some manufacturers to secure certain volumes of need-based orders. However, overall transaction volumes remained fairly limited.

On the demand side, the EV battery market has seen order contractions compared to earlier expectations, impacted by lackluster new energy vehicle sales both domestically and internationally. Currently, the domestic market is experiencing only conventional seasonal recovery, while overseas markets are primarily supported by export rush demand, showing relatively better performance in March. In the e-mobility and consumer battery segments, downstream demand appears generally subdued. Some cathode manufacturers continue to maintain production schedules supported by orders secured before and after the Chinese New Year holiday.

Overall, ternary demand recovery lacks momentum, and the market maintains a cautious outlook regarding April demand recovery.