[SMM Analysis]In July, China's production of ternary cathode materials increased significantly MoM, with a higher proportion of high-nickel content.

In July 2024, China's ternary cathode materials production reached 58,845 mt, up 19% MoM and 3% YoY, with a cumulative YoY increase of 13% from January to July. In terms of supply, some ternary cathode materials manufacturers reduced production in July due to weak overseas demand. However, driven by leading high-nickel manufacturers actively building inventories and significantly recovering production schedules, the overall domestic production of ternary cathode materials increased substantially in July. In July, the share of 5-series ternary materials was 28%, 6-series was 29%, and 8-series was 39%, with the proportion of high-nickel materials increasing compared to the previous month. Ronbay, Ruixiang, and Bangpu ranked as the top three in ternary cathode materials production in July, with CR3 at 45%, CR5 at 55%, and CR10 at 74%, indicating a higher market concentration compared to June.

Demand side, in July, ternary battery cell production reached 27 GWh, up 9% MoM. The procurement demand for ternary cathode materials from leading battery cell manufacturers improved, with the sales expectations for related new energy vehicle models looking positive for the upcoming "September-October peak season." Due to the impact of the new national standards, the demand for ternary battery cells in two-wheelers decreased, leading to fewer orders. The demand for power tools recovered compared to the same period last year, with current orders remaining stable. The demand for digital and 3C products continued to be weak.

In August 2024, China's ternary cathode materials production is expected to reach 60,905 mt, up 4% MoM and 8% YoY. The production of ternary cathode materials in August is expected to increase slightly. Except for a few manufacturers adjusting their production schedules and slightly reducing output, most manufacturers are expected to maintain stable or slightly increased production in August.