[SMM Analysis] domestic Battery Enterprises consume Raw Materials inventory Ternary material Price pressure

April 10: according to the latest quotation from SMM on April 10, the price of power ternary material is 11.9-125000 yuan / ton, the average price is 122000 yuan / ton, which is stable compared with the previous day; the price of power ternary material is 13.6-142000 yuan / ton, the average price is 139000 yuan / ton, down 1000 yuan / ton from the previous day.

From the downstream market, Japan and South Korea on the new crown virus epidemic control is relatively better than Europe and the United States, China's ternary materials and precursors overseas orders to Japan and South Korea. Orders in overseas markets did not fall sharply as of early April. However, domestic new energy vehicle sales data fell for six months in a row, adding that China was severely affected by the epidemic in the first quarter. Battery and new energy vehicle factories removed inventory, and orders for local ternary materials and precursors fell to varying degrees in April.

In terms of raw material supply, although the supply of raw materials in Africa, Australia and other regions has also been reduced due to the impact of the epidemic, taking into account the relatively sufficient inventory of upstream production enterprises, cobalt sulfate producers have about 10,000 tons of raw materials (including in storage and on the way), which can be sustained for two months; spodumene mine domestic port inventory is sufficient, can still be converted into about 40,000 tons of lithium carbonate equivalent, the current reduction in raw material imports can not support the domestic ternary material market price.

A number of ternary material manufacturers surveyed by SMM learned that orders from manufacturers dominated by domestic customers fell to varying degrees in April, while orders from enterprises with overseas customers increased slightly. A manufacturer of ternary materials in central China revealed that as a result of the epidemic, the battery sales of a domestic battery manufacturer fell by 20-30% in the first quarter. Orders fell slightly in April and production plans were relatively down. However, as the impact of the current epidemic continues, power battery market demand uncertainty is high, digital battery market competition is fierce, ternary materials enterprises still hold a wait-and-see attitude to the market in May.

To sum up, weak orders in the downstream market will continue to affect the operating rate of ternary material manufacturers, upstream raw materials will not be tight in the short term, SMM expects the market price of ternary materials will continue to decline.