Domestic Precursor Exports Declined in August while Energy Crisis and Inflation Weighed on Production and Sales in Europe

SHANGHAI, Sept 30 (SMM) - China exported 15,464 mt of precursors of cathode active materials (including NCA) in August, 2022, a month-on-month decline of 3.9% and a year-on-year increase of 45%. From January to August, 2022, China’s exports of precursors of cathode active materials (including NCA) amounted to 121,554 mt, an increase of 39% on the year. Generally speaking, the overall export volume of ternary precursors in August was down from that in July. Among them, the exports of NCM increased, but exports of NCA and NC precursors both diminished, which contributing to the decline in overall exports. It should be noted that the increase in NCM exports reflected the improving demand in the US power battery market. The Russian-Ukrainian conflict has been in a stalemate. At the same time, the energy crisis and the Fed’s repeated interest rate hikes have put pressure on the European economy. Inflation and other factors together led to a decline in the consumption, which indirectly caused NC and NCM exports to drop for several consecutive months.

On the export front, Zhejiang was the largest exporting province in August, accounting for 26% of the total exports. In fact, the exports from the province has been stable in recent months. In terms of the destination of exports, the share of exports to South Korea remained basically unchanged in August, with LGC, Samsung SDI, ECOPRO the major importing enterprises. Thanks to the thriving demand in the US auto market, it is expected that LG battery factory will receive significantly increasing orders in September and October, which will prompt South Korean material companies to increase their purchase of precursors from China.

New NEV registrations in the eight European countries totalled 121,300 units, up 1.7% on the year and down 1.7% on the month. Affected by supply chain problems and the slowdown of the European economy, the overall passenger vehicle market has yet to recover. The sales of pure electric vehicles has grown steadily, while the falling sales PHEVs have pulled down the overall sales. The production capacity of Tesla’s plants kept climbing, and the sales have rebounded significantly. The French government’s plan to implement an incentive policy for electric vehicle leasing at the end of August, with a monthly rent as low as 100 euros, might boost the enthusiasm for car purchases. The penetration rate of the eight countries in Europe rose 4.1 percentage points to 23%. In August, the sales of new energy vehicles in the United States reached 83,000 units, up 70% year-on-year and down 3% month-on-month. Its penetration rate dropped 0.3 percentage point month-on-month to 7.2%. Among them, the sales of pure electric vehicles reached 68,000 units, up 109% year-on-year and down 2% month-on-month; the sales of plug-in hybrid vehicles reached 14,000 units, down 11% year-on-year and 9% month-on-month. In terms of brands, Tesla continued to top among all, and it is expected to receive more demand when the subsidy is restored. It is expected that in September, the US market will continue to boom, while the European market will see a slight boost in demand since the production is predicted to increase with the end of the summer break. Therefore, the domestic exports of ternary precursors are estimated to inch higher in September.