The prices of battery-grade lithium carbonate added Yuan 10,000/tonne or 3.25% on a weekly basis to Yuan 317,500/tonne as of June 9, while the retail price was around Yuan 320,000/t. Battery-grade lithium hydroxide, on the other hand, was reported at Yuan 317,000/t, flat on the week.
Figure 1-1. Lithium carbonate and lithium hydroxide price trend (Yuan/t)
Source: Mysteel
The production of new energy vehicles (NEVs) totaled 668,000 units in May, up 11.4% m/m and 53.7% y/y. Among them, the production of BEV rose 6.4% m/m and 40.2% y/y to 471,000 units, while that of PHEV also set a m/m growth of 25.3% to 197,000 units, up 99.9%y/y.
NEV sales also demonstrated a palpable increase on the year by 60.9% at 580,000 units thanks to a low base last year when the COVID-19 pandemic was severe, and rose 10.5% m/m. Specially, the sales of BEV and PHEV stood at 388,000 and 192,000 units respectively, up 7.6% and 17.0% m/m, and 45.0% and 106.8% y/y. PHEV outperformed BEV by m/m boost driven by the rapid growth of BYD, whose sales in May gained 14% m/m and 109% y/y at 239,000 units.
With regard to battery production, the combined installed capacity of BYD power battery and energy storage battery was 11.49 GWh in May, adding 15.5% m/m. The shipment of energy storage battery showed stronger momentum, and the demand growth of LFP battery triumphed that of ternary battery. It is likely that the growth momentum will extend into June, with an expected monthly increase of 9% according to the manufacturers' feedback.
Figure 1-2. Power battery installed capacity (GWh)
Source: Mysteel
The battery manufacturers' in-plant inventory is still at a high level at present, hence their June production scheduling is more aggressive than the cathode material manufacturers. In May, the output of LFP and ternary cathode material was 119,600 t and 44,100 t respectively, up 28.05% and 3.54% m/m, per Mysteel statistics. The June production scheduling of the two cathode materials gains further by 6.69% and 6.78% m/m respectively.
Table 1-1. Output and production scheduling of cathode material manufacturers (t)
Source: Mysteel
The demand for lithium carbonate is estimated at 39,000-40,000 t in June based on the available production scheduling. It can be seen from the figure below that the supply surplus of lithium carbonate has been narrowing since April as a result of thriving downstream market, and lithium carbonate prices will gain support from the expected supply gap in June.
Figure 1-3. Lithium carbonate supply-demand balance
Source: Mysteel
The combined output of mainstream lithium carbonate manufacturers stood at 32,400 t in May, up 16.55% m/m; and that of lithium hydroxide also showed a m/m increase of 10.5% at 24,200 t. The output of lithium carbonate and lithium hydroxide is expected to maintain growth by 1.85% and 3.31% m/m respectively to 33,000 t and 25,000 t in June.
Table 1-2. Lithium compounds' output and production scheduling (t)
Source: Mysteel
The prices of lithium carbonate will be underpinned by improving downstream demand as well as low lithium carbonate inventory held by cathode material manufacturers. However, as the upstream players are firm to the prices, the downstream buyers stand on the sidelines. Taken together, lithium carbonate prices are expected to move between Yuan 300,000-340,000/t in June.
Written by Aggie Hu, huchenying@mysteel.com
