Price review
In February, the ternary precursor materials price experienced a slight rise. On the cost side, cobalt prices remained weak and stable, while nickel sulphate saw a minor rebound. From a supply and demand perspective, the ternary precursor market maintained a situation of weak supply and demand. Some leading precursor companies underwent partial shutdowns for maintenance, and the decrease in operating rates of cathode companies similarly led to a decline in precursor material demand. Due to tight supply, nickel sulphate prices rose, driving precursor companies to raise quotations in line with costs.
Output review
China's ternary cathode precursor production in February 2024 was about 61,590 mt, down 20% MoM and 7% YoY. February's off-peak season saw precursor companies adjust production to match sales, resulting in decreased output. Maintenance shutdowns at some plants further reduced overall production. Vertically integrated firms fulfilling cathode orders and thoseserving overseas markets continued operations during the holiday period. Domestic cathode producers moved their precursor inventory consumption from February to January, reducing February demand, but demand for 6-series materials from leading battery cell makers stayed robust. Despite increased overseas cathode production, stable international demand persisted for
some Chinese precursor firms in February due to limited foreign precursor capacity.
For March 2024, the domestic EV market's preference for mid-to-high-nickel materials is increasing demand for ternary cathode precursors. Additionally, rising nickel prices are leading consumer market players to build up their precursor inventories. As the ternary market heats up, supply varies by company. Those with integrated nickel resources may increase scheduled production to meet orders, while others consider raw material costs higher than selling prices, leading to selective order acceptance and potentially reduced production. The March 2024 forecast for China's ternary cathode precursor production is 71,606 mt, up 16% MoM and 32% YoY. From January to March, China's cumulative ternary precursor production may be about 209,961 mt, up 18% YoY.
Please do not hesitate to contact Jean at jeantang@smm.cn or 86-19946295759 if you have any question or inquiry.
