In May 2024, China's ternary cathode material production was 51,900 mt, down 20% MoM and 5% YoY. The cumulative production from January to May was 282,300 mt, up 22% YoY.
From the supply side, ternary cathode material production saw a significant decline in May, mainly due to a decrease in downstream orders and substantial destocking pressure. Since mid-May, with the weakening of lithium prices, battery cell manufacturers have reduced their orders. The pressure on finished product inventories of cathode material manufacturers also became evident, leading to lower-than-expected production levels in May.
Regarding the proportion of material types, the 5-series accounted for 25%, with a MoM increase of 2%, mainly due to the already low base of 5-series materials; the 6-series accounted for 32%, with a MoM increase of 1%; and the 8/9-series accounted for 35.9%, with a MoM decrease of 3%.
In terms of competitive landscape, the market share of manufacturer focusing on medium-nickel materials rose to the top position, reaching 17%. In terms of market concentration ratio in the ternary cathode materials market, CR3 was 40%, CR5 was 53%, and CR10 was 77%.
From the demand side, in May, the procurement demand for ternary cathode materials by battery cell manufacturers saw a significant decline. According to preliminary statistics from third-party institutions, the wholesale sales of new energy passenger car manufacturers nationwide in May reached 910,000 units, up 35% YoY and 16% MoM. Although the NEV market showed optimistic performance, it was still dominated by LFP models represented by BYD. Since February, the share of ternary lithium batteries installation has been declining month by month, leading to limited demand for ternary materials. From the battery side, the production of ternary lithium batteries in May decreased by 2% MoM. Battery makers were in the stage of depleting raw material inventories. Additionally, the demand in consumer and e-bike markets remained stable. First-tier manufacturers maintained full production of small cylindrical batteries, and second-tier manufacturers also showed some recovery compared to last year.
In June 2024, the production of ternary cathode materials in China is expected to be 49,770 mt, with a MoM decrease of 4% and a YoY decrease of 10%. Output in H1 may drop 16% YoY.
