SMM Analysis of China December Ternary Cathode Material Production and January Forecast

In December 2024, China's ternary cathode material production decreased by 6.5% MoM, up 7.2% YoY, with a cumulative YoY increase of 10.5% for the year. The overall operating rate in December was around 39%, showing a decline compared to October. In terms of supply, the concentration among leading companies remained high in the month, while the production scale of small and medium-sized enterprises further declined. Coupled with year-end adjustments by some downstream battery companies in controlling finished cathode material products, orders for ternary cathode materials decreased in the month.

Regarding series proportions, in December, 5-series ternary cathode materials accounted for 22%, 6-series for 31%, and 8-series for 40%. Compared to the previous month, the proportion of 8-series materials showed a slight increase, while the share of 5-series continued to decline, and the proportion of high-nickel materials kept rising.

From the market structure perspective, the production share of the top 3 companies (CR3) in the month was 45.9%, CR5 was 60.4%, and CR10 reached 79.4%, with market concentration showing a slight increase compared to November.

On the demand side, the domestic production of ternary power battery cells in December decreased by approximately 6% compared to November. Battery companies reduced their year-end production schedules due to inventory control and weakening expectations for a rush for installations.

Looking at the production schedule for January 2025, China's ternary cathode material production is expected to decrease by 4.5% MoM. The market concentration among leading companies is expected to further increase in January, with most manufacturers showing slight production reductions, except for a few companies whose production is expected to rise.