SHANGHAI, Mar 17 (SMM) - Battery downstream and terminal markets: According to China Association of Automobile Manufacturers, new energy output and sales in February failed to set a new historical record, but still maintained rapid development as in 2021. The output and sales both increased by more than 1.8 times year-on-year. But the industry is also restricted by the lack of chips, surging raw materials prices and shrinking subsidies, and car companies supply chain stability and cost end encountered many challenges.
Since March, there have been nearly 20 new energy vehicle companies announcing price hikes, involving nearly 40 models. Taking Tesla and BYD as the example, the price hike covers both LFP and ternary cathode batteries, and the market has already seen a broad-based increase, which indicates that future price increases will become the "realistic choice" for more car companies.
Cobalt: Refined cobalt prices have fallen this week. Refined cobalt prices have been at a high level in the past few weeks, with rare inquiries and cautious purchase from the downstream. The fundamentals of refined cobalt have been in a dilemma since the beginning of 2022 amid fluctuating nickel prices and great volatility in cobalt futures prices. The recent retreat was a result of market sentiment.
Cobalt salt prices were stable this week, as they were underpinned by rising raw material and auxiliary material prices.
On the demand side, ternary cathode material factories saw rising in-plant inventories due to difficulties in securing lithium sources and rising nickel prices, creating less demand for PCAM (precursor for cathode active material), and indirectly reducing the demand for cobalt. In addition, the frenzying nickel prices may prompt PCAM manufacturers to default toward downstream customers, hence affecting the output and demand for cobalt sulphate. Hence cobalt salt prices stabilised in the absence of buyers.
Lithium: Lithium carbonate prices rose slightly this week. On the supply side, the manufacturers have resumed normal production. And the supply from Qinghai also improved. The supply tightness of lithium carbonate eased.
On the demand side, the changes of prices could hardly be transmitted through the LFP industry chain due to falling terminal demand and on-going negotiation with battery companies. For ternary cathode materials, the restocking rhythm was normal. Market transactions were thin as it was not yet the high time for concentrated procurement, hence the prices stabilised as a whole.
Lithium hydroxide prices rose slightly this week. And lithium salt plants mostly sold under long-term orders due to low supply, hence the spots were in shortage.
On the demand side, orders for high-nickel products from the power battery sector was satisfactory, but the e-bike battery market was more sensitive to price changes, which may result in shrinking demand when lithium and nickel prices were high.
Transactions were scarce this week. The prices of lithium hydroxide rose more greatly than lithium carbonate amid tight supply of spots. It is expected that centralised procurement would begin next week.
PCAM and CAM: PCAM prices stabilised this week. PCAM cost dropped due to falling nickel salt prices and stable cobalt prices. But due to fluctuating nickel prices, PCAM manufacturers basically made no quotations. If SHFE – LME nickel price spread stood great, it may affect PCAM output in April.
The prices of 5 and 6 series NMC materials were stable, while that of 8 series rose slightly. On the cost side, lithium carbonate prices stabilised by lithium hydroxide prices kept rising. PCAM prices were also stable. The cost of high-nickel materials rose slightly.
On the supply side, large companies maintained moderate operating rates, but small-sized companies had to curtail their production due to purchase difficulties and financial pressure. On the demand side, the high cost was smoothly transmitted to the power battery sector. But for non-power battery sectors, the follow-up production was contained by high nickel, cobalt and lithium prices. It is expected the prices of NMC materials will follow the moves of cost, and stabilise as a whole.
For LFP, the supply of raw materials eased to some extent with added sources from brine lakes. Meanwhile, market demand tended to be rational amid negotiations between material factories and terminal companies. LFP prices were stable as a whole, with mainstream prices quoted at 162,000 yuan/mt.
Nickel: LME nickel was closed until this Wednesday. SHFE nickel moved without influence from LME nickel, and hovered at a high level. Meanwhile, nickel prices are unlikely to return to the low level in light of new LME trading rules, and the SHFE – LME price spread will need longer time to be repaired.
The upstream cost, that is priced based on LME nickel, has been rising fast. In addition to the cost, the hindered imports would also reduce domestic production of nickel salt. As such, nickel salt prices offered by salt plants have been raised to a high of 53,000 yuan/mt amid expected falling supply and rising cost.
Nonetheless, steeply rising prices have put great pressure on downstream participants. For PCAM manufacturers, as the rising cost cannot be transmitted to the downstream smoothly at present, they refrain from purchasing raw materials in light of existing raw material stocks, and they also differ greatly with slat plants regarding the ideal prices. And in terms of supply and demand, if PCAM manufacturers maintained current production rhythm, the salt plants may have to reduce their production for lack of raw materials, tightening the supply of nickel sulphate.
![[SMM Ulasan Mingguan Separator] Pertumbuhan produksi terus tertinggal dari permintaan pengguna akhir, dengan kesenjangan pasokan-permintaan yang melebar](https://imgqn.smm.cn/usercenter/BmqWy20251217171726.jpg)
![[SMM Analysis] Musim Puncak Pasar Kobalt Dimulai dengan Lambat: Pemulihan Permintaan Gagal Meningkat](https://imgqn.smm.cn/usercenter/olwlF20251217171731.jpg)
