Home / Metal News / SMM analysis on China June ternary cathode materials output and July forecast

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

iconJul 11, 2024 15:52
Source:SMM
In June 2024, China's ternary cathode material production was 49,345 mt, down 5% MoM and 11% YoY. In H1, the YoY increase was 15%.

In June 2024, China's ternary cathode material production was 49,345 mt, down 5% MoM and 11% YoY. In H1, the YoY increase was 15%.

Supply side, in June, the overall scheduled production of ternary cathode material plants slightly declined. With lithium prices still falling in June, most material plants, facing mid-year earnings report pressure, chose to cautiously produce and destock to reduce inventory impairment risks. By material type, the proportion of 5-series was 26%, 6-series was 33%, and 8/9-series was 37%, with the proportion of high-nickel materials declining MoM. In the digital and e-bike market, according to SMM statistics, the production of ternary cathode materials in this segment was 7,965 mt in June, accounting for about 17% of the total ternary cathode material production, slightly down from May. In June, manufacturers mainly produced for previous orders. In terms of market competition, Ruixiang New Materials, which mainly produces medium-nickel materials, ranked first again in June, indicating stable and positive domestic demand for medium-nickel from CATL. The second and third places were Ronbay and Bamo. The overall market CR3 was 39%, CR5 was 53%, and CR10 was 76%, with no significant changes from May. Demand side, in the NEV market, June car sales data showed an upward trend. According to preliminary data from CPCA, retail sales of new energy passenger vehicles increased by 7% MoM. However, in June, battery cell production and car sales diverged again, mainly due to battery cell manufacturers controlling inventory at mid-year, with ternary battery cell scheduled production down by 10%, leading to a decline in procurement demand for ternary cathode materials.

In July 2024, China's ternary cathode material production is expected to be 57,400 mt, up 16% MoM and down 1% YoY. From January to July, the YoY increase might be 15%. Supply side, in July, ternary cathode material production is expected to rise, mainly due to a good recovery in scheduled production by leading high-nickel ternary material manufacturers. Except for some manufacturers with declining orders and scheduled production, the overall scheduled production of major domestic ternary cathode material manufacturers showed a slight recovery. By material type, the proportion of 5-series was 23%, 6-series was 30%, and 8/9-series was 43%, with the proportion of 5-series slightly declining and 8/9-series increasing. In terms of market competition, Ronbay will regain the top position, with a market share exceeding 20%, followed by Ruixiang and Brunp. The overall market CR3 might be 47%, CR5 at 63%, and CR10 at 79%, showing a significant increase in market concentration compared to June, indicating that the material industry is in a reshuffling period.

Analyzing the reasons for the increase in July, besides order increase from battery makers, which is linked to car sales, other factors include: 1) Inventory factors: In June, both battery cell and material plants chose to control inventory, with inventory levels below the safety threshold. After the mid-year financial reporting period, battery cell and material plants will rebuild healthy inventories in July. 2) Raw material prices: As of July 5, the average price of lithium carbonate was 90,630 yuan/mt, down 7% from the average price in June. With lower raw material prices in July and expectations of a small rebound in lithium prices in H2, some material manufacturers may increase production.

Demand side, in the EV battery market, the production of ternary EV batteries in July is expected to increase by 6% MoM. The procurement demand for materials by leading domestic battery cell manufacturers has improved, with some restocking activities. Additionally, overseas EV market demand showed a divergent trend, with procurement demand improving for leading battery cell manufacturers and weakening for second-tier battery cell manufacturers. In the consumer and e-bike market, the digital market entered the traditional off-season in July, and the demand for ternary materials in the two-wheeler market declined due to new technical regulations. Overall, market demand is expected to rise.

Output

For queries, please contact Michael Jiang at michaeljiang@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news