[SMM Analysis] Downstream Demand Stable but Raw Material Performance Remains Poor, Precursor Prices Decline

This week, ternary cathode precursor prices weakened. During the week, nickel sulphate and cobalt sulphate prices declined, while manganese sulphate prices held steady.

Discount side, for August and Q3 orders, given relatively high earlier costs for sulphate raw materials, some producers are willing to offer higher discounts. Long-term contracts, some producers’ long-term contracts were already agreed at the beginning of the year. Most producers have not yet seen any increase in coefficients. For quarterly orders, downstream customers are also less receptive to coefficient increases. Apart from some top-tier producers with certain bargaining power, most producers remain broadly stable overall compared with Q2. Spot orders, because prices of nickel and cobalt salts have been relatively weak recently, some downstream enterprises are seeking to toll process raw materials or produce them in-house, and August order coefficients are expected to weaken somewhat.

Production, top-tier producers’ export orders continued to perform well this month, with production schedules at relatively high levels. China’s top-tier producers also saw a notable recovery in operating rates, but some small and mid-sized producers still had relatively low production schedules due to the off-season.

Looking ahead, sulphate prices have not yet shown a clear rebound, and subsequent new-order prices will need to be monitored against actual downstream demand during the peak season.