[SMM Analysis] Review of the Ternary Cathode Materials Industry in H1 2024, H2 outlook remains tough

According to SMM statistics, China's production of ternary cathode materials in H1 2024 was 330,000 mt, up 13.8% YoY from 290,000 mt in H1 2023, with a capacity utilisation rate of around 40%. In terms of prices, direct materials accounted for over 70% of the cost of ternary cathode materials. The prices of major raw materials, influenced by the prices of lithium, nickel, and cobalt, were on a downward trend in H1 2024. According to the pricing model of the ternary cathode materials industry, the prices of ternary cathode materials declined in H1 2024, significantly impacting the revenues of major ternary cathode materials companies due to the drop in raw material prices:
Easpring's operating revenue in H1 2024 was 3.541 billion yuan, down 57.85% YoY; net profit attributable to the parent company was 287 million yuan, down 69.01% YoY.
Minmetals New Energy (Hunan Changyuan Lico) achieved an operating revenue of 2.507 billion yuan in H1 2024, down 48.73% YoY; net profit attributable to the parent company was -65 million yuan, down 98% YoY.
Xiamen Tungsten New Energy's operating revenue in H1 2024 was 6.3 billion yuan, down 22.43% YoY; net profit attributable to shareholders of the listed company was 239 million yuan, down 6.12% YoY.
Ronbay Technology's operating revenue in H1 2024 was approximately 6.888 billion yuan, down 46.58% YoY; net profit attributable to shareholders of the listed company was approximately 10 million yuan, down 97.29% YoY.
Zhenhua New Materials achieved an operating revenue of 972 million yuan in H1 2024, down 70.16% YoY; net profit attributable to the parent company was -203 million yuan.
It is evident that the ternary cathode materials industry faced a very challenging situation in H1 2024, with significant declines in both revenue and profit, and many companies experiencing severe operational losses, indicating cut-throat competition within the industry.
Looking ahead to H2 2024, the price war in the end-user vehicle market remains intense. Although NEV sales have been steadily growing, ternary cathode materials continue to be significantly squeezed by LFP. The downstream battery cell market is clearly monopolized, and the bargaining power of midstream ternary cathode materials manufacturers is dispersed. It remains difficult for ternary cathode materials companies to achieve profit recovery in H2 2024, with a long and challenging road ahead.