SMM analysis on China June ternary cathode precursor output and July forecast

In June 2024, China's ternary cathode precursor production was about 58,652 mt, down 8% MoM and 21% YoY. From January to June, the cumulative production was 411,556 mt, up 12.01% YoY. Supply side, in June, the negative feedback from inventory adjustments at the battery cell end affected the ternary cathode materials, reducing their procurement of precursors. Together with the declining prices of metal salts, precursor companies were less active in raw material procurement. The combined impact led to a significant decline in scheduled production of ternary cathode precursors. Domestic demand weakened overall. Overseas demand showed a divergent trend but remained generally weak.

In July 2024, demand side, after the inventory adjustments at leading battery cell companies, they resumed just-in-time procurement. Supply side, metal salt prices gradually stabilized, and some precursor companies resumed raw material stockpiling. The expected production of ternary cathode precursors in China for July 2024 is 61,384 mt, up 5% MoM and down 22% YoY.