In April 2024, China's ternary cathode material precursors output decreased by 4% month-on-month, falling short of expectations

In April 2024, China's production of ternary cathode material precursors was approximately 73,693 mt, a decrease of 4% month-on-month and an increase of 38% year-on-year. So far, from January to April, China's cumulative production of ternary precursors has reached 288,958 mt, with a cumulative year-on-year increase of 24.63%.

On the supply side, in April, precursor companies were constrained by high metal salt prices and selectively accepted orders, scheduling production based on sales. As a result, the supply of precursors fell short of expectations, leading to a slight decrease. On the demand side, most domestic cathode companies were stocking up to meet rigid demand. The demand for 6-series NMC materials from leading battery cell manufacturers remained strong domestically. In terms of overseas demand, some precursor companies saw a steady decline in overseas orders.

Looking at the demand side in May 2024, cathode production is generally weakening. Long-term orders have slowed down the procurement of precursors. For spot orders, due to high nickel salt prices, some small factories are still reliant on external sourcing due to high production costs. However, the overall volume is relatively small, making it difficult to significantly increase demand. On the supply side, although some companies may see a decline in overseas orders, coupled with high raw material prices, supply is expected to remain weak, and precursor production will continue to be scheduled based on demand.

It is expected that China's production of ternary cathode material precursors in May 2024 will be 68,218 mt, a decrease of 7% and an increase of 11% year-on-year.