【SMM Analysis】Robust EV Market Boosts China's Ternary Cathode Production in May

This week, ternary cathode material prices rose sharply. On the raw material front, nickel sulfate prices continued to increase, while cobalt sulfate and manganese sulfate remained stable. Spot prices of lithium carbonate and lithium hydroxide rose significantly after the holiday, jointly driving a rapid increase in ternary cathode material prices.

In terms of transactions, the market remained focused on executing previously signed long-term contracts. Most manufacturers currently use quarterly contracts, with the associated payables maintaining original levels. The increase in upstream nickel sulfate prices has not yet been passed through to the payables for settlements between cathode manufacturers and battery cell manufacturers. On the spot contract front, with raw material prices remaining high, transactions have continued to be quiet.

On the demand side, May domestic ternary cathode production schedules show a significant increase exceeding expectations. The main reasons include: first, the recent concentrated launch of new vehicle models has generated stocking demand, with downstream battery cell manufacturers holding positive expectations for future orders and relatively active pick-ups, boosting cathode manufacturers' production schedules; second, overseas markets, particularly Europe, have seen strong vehicle sales, with second-quarter sales expected to continue improving, providing a boost to cathode demand. In addition, certain brands have periodic restocking needs. The above factors have collectively driven an increase in manufacturers' production schedules. On the consumer market and e-mobility market front, as they remain in the traditional off-season, near-term demand has been relatively flat.