[SMM Analysis] May Power Battery Market orders continue to reduce passive "accumulation" of Ternary material manufacturers

April 22-the market for a short-term improvement in the epidemic situation in China in March is expected to improve. Battery manufacturers increased their orders slightly in April, and ternary materials manufacturers increased their operating rate one after another due to the increase in downstream orders in April. However, after mid-April, the demand for new energy vehicles downstream of the power battery was sluggish, the order delivery of the battery enterprise was not smooth, and the downstream manufacturers asked to postpone the delivery of the goods one after another, and a large battery manufacturer reduced its production by about 40-50%. While some manufacturers are considering "sinking" into the digital market, orders for digital batteries continue to decline as a result of the overseas epidemic. Sanyuan material manufacturers have been in decline in downstream orders since mid-April.

Upstream supply, according to SMM, ternary precursor manufacturers in April production rate decreased slightly, May is not temporarily planned to reduce production, ternary precursor supply is sufficient. After the reduction in downstream orders, precursor manufacturers have begun to "secretly compete" for May orders, and precursor prices have been loosening since this week. Lithium salt manufacturers also do not have too many production reduction plans, only a small number of enterprises short-term maintenance and adjustment of production lines, each factory still has sufficient inventory.

On the other hand, under the influence of downstream demand, the consumption power of end customers is weak, and the sales of new energy vehicles continue to decline. At present, the rework rate of overseas automobile manufacturers is low, and export orders are sporadic. A large ternary material manufacturer in South China has revealed that the company's export orders have also been reduced as a result of the epidemic.

In addition to Tesla Shanghai plant continues to open up operating capacity, other car plant operating rate has not increased significantly, battery manufacturers also reduced orders. After the production of a large domestic battery manufacturer has been reduced, the orders of the ternary material manufacturers have been affected to varying degrees. According to SMM customer feedback, ternary materials manufacturers have been out of inventory before the Spring Festival began to increase, May downstream orders will continue to decline, so manufacturers have also begun to reduce operating capacity.

To sum up, the decline in domestic power battery orders in May has become a fixed trend, and ternary material manufacturers are passively "accumulating". In order to reduce operating costs, manufacturers reduce production and lower the purchase price of raw materials. Upstream raw material manufacturers although high prices but prices are still under pressure, SMM expects the end of April before the ternary materials and ternary precursor prices still have some downward space.

SMM cobalt lithium new energy research team

Hu Yan 021-51666809

Qin Jingjing 021-51666828

Mei Wangqin 021-51666759

Huo Yuan 021-51666898

Wuyang 021-51666818