Ternary cathode precursor
Limited decline in nickel salt and cobalt salt prices, coupled with subdued market activity, kept precursor prices stable in the week ending April 3, with discount coefficient still at 90-93%. To cope with losses, precursor producers mostly took orders from major clients. Order growth was primarily reflected in 6-series precursors, mirroring downstream production schedules. With nickel salt and cobalt salt prices in a downward trajectory, downstream cathode makers restocked precursor only as needed. Precursor prices are at risk of falling due to cost fluctuations, but low stocks in the industry chain and growing end-user orders mean its downside room should be minimal.
Ternary cathode material
Ternary cathode material prices rebounded a little in the week ending April 3. Climbing lithium prices pushed up cathode costs. Entering April, major battery cell makers reduced lithium carbonate supply to cathode makers. Cathode makers are still struggling to make money under the current settlement mechanism. Ternary cathode material output spiked 32% MoM in March, but the growth rate may slow down to less than 10% in April. Popular medium-nickel materials are poised to record notable output growth in April. EV sales achieved remarkable MoM growth in March and are set to maintain solid increase in April. Some EV makers launched a price war in early April to secure market share. Since battery cell stocks are already at low levels, growing EV sales should smoothly translate into better demand for battery cells and ternary cathodes. As lithium prices trended up in March, some battery cell makers stocked up ternary cathodes. Ternary cathode prices may see small fluctuations along with metal prices.
LFP
Lithium carbonate prices have increased recently, but this has yet to pass onto LFP prices. In March, LFP production rose considerably MoM and is expected to grow further in April. Battery cell makers are ramping up production, including smaller manufacturers. Despite perceived strong market demand, LFP cathode manufacturers face challenges in maintaining profits due to competitive pricing pressures in the EV market.
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