[SMM Analysis] The Production Pace of Ternary Cathode Precursor Producers Was Expected to Recover This Week

This week, ternary cathode precursor prices rose significantly further. On the raw material side, nickel sulphate prices increased notably, while cobalt sulphate and manganese sulphate prices rose slightly, collectively driving up precursor prices. In long-term contract negotiations, due to considerable uncertainty about future raw material price trends and a stalemate in commercial terms between upstream and downstream players, some producers have decided to forgo signing long-term orders, opting instead for short-term (e.g., monthly or quarterly) contracts as a transitional measure, allowing both sides to respond more flexibly to market fluctuations. In terms of discounts, downstream customers in the EV market maintained a firm stance on pricing, unwilling to make concessions; meanwhile, discounts in the small power and consumer markets generally saw an increase.

On the demand side, overall production pace changed little this week, but it is expected to gradually accelerate starting this week. Although current raw material prices remain high, ternary cathode precursor demand is projected to recover slightly in the near term due to two factors: first, some producers began stockpiling ahead of the Chinese New Year; second, the export tax rebate for ternary cathode precursors and cathode materials is expected to be cancelled, while the rebate policy for lithium battery exports will also be phased out, which is likely to spur a short-term rush to export. The specific incremental volume driven by this export rush will depend heavily on the progress of negotiations between producers and overseas buyers, as well as subsequent demand changes from overseas cathode plants.