【Cathode Material Output Up 55% YoY in March, Expected to Slow to 16% Growth in April】

On the supply side, the total output of the four major cathode materials saw a 55% increase in March, with lithium iron phosphate materials seeing a 70% increase. Lithium iron phosphate companies' orders have been gradually recovering in March, with leading companies seeing notable order increases, higher operating rates, and increased supply. Nickel-cobalt-manganese (NCM) materials saw a 33% increase, with mid-nickel NCM being a hot market product, maintaining substantial growth in March, while low-nickel and high-nickel NCM also recovered from the February trough. Lithium cobalt oxide and lithium manganese oxide achieved 44% and 26% year-on-year increases respectively. It is expected that in April, the total output of the four major cathode materials will increase by around 16% month-on-month, with lithium iron phosphate materials seeing the highest growth among the four, expected to reach around 20%, demonstrating strong momentum. NCM materials are expected to see around 10% month-on-month growth, with a relatively slower pace compared to March.

On the demand side, in March, the high-end laptop market saw a moderate recovery. In the small power market, demand for two-wheelers increased slightly, and the demand for electric tools remained relatively stable. Additionally, the consumer and small power markets are still unable to fully digest the high-price inventory buildup caused by metal price fluctuations, leading to increased purchasing frequency. In the power market, vehicle sales were impressive in March, with gradual depletion of previous channel inventories bringing dealer inventories back to healthy levels. Domestic new energy vehicle price wars have driven consumer purchasing enthusiasm, with sales growing month-on-month, combined with preparation for new model launches in the first quarter, boosting demand for battery cells and cathode materials. In the energy storage market, driven by the mid-year grid connection peak as well as stable lithium prices, downstream procurement demand has recovered, leading to increasing demand for lithium iron phosphate materials. It is expected that in April, demand in the consumer and small power markets will maintain a slight upward trend, but battery cell manufacturers have stringent requirements on material prices, making it difficult for material producers to translate volume increases into profit increases. In the power market, some automakers initiated price wars at the beginning of the month to avoid order weakness, and with the upcoming auto show, this may further boost new energy vehicle sales, leading to increased battery cell production and sustained demand growth for NCM and lithium iron phosphate.