2024 has been a tough year for domestic ternary players amidst slowing demand and poor profits, which has encouraged them to go overseas to seek new growth, in addition to other driving forces like the customs duties.
In retrospect, China's ternary precursor market experienced smooth destocking in the first half of 2024, which helped to stabilize the prices. Specially, the precursor prices were lifted by the bullish nickel sulfate price in the second quarter. Nevertheless, the precursor market embarked on the downward trajectory due to oversupply in the second half of 2024.
The ternary cathode material market showed a similar pattern. And the prices lacked momentum amidst intensive market competition and falling raw material prices in the second half.
Thanks to China's robust electric vehicle (EV) market, the production of ternary precursor and ternary cathode materials managed an annual growth of 12.75% and 12.7% respectively in 2024. In detail, the medium-nickel high-voltage NMC material was popular on the market, boosting the market share of 6-series ternary products.
Source: Mysteel
However, rising production did not necessarily bring more revenue. In the second half, the price war on the EV market was quite intensive, which squeezed the ternary players' profits, in addition to the drastic development of LFP cathode.
According to Mysteel survey, the theoretical profit margins of NMC 532 precursor (polycrystalline, consumer) producers that reply on outsourced raw materials have been in the negative for most of 2024, indicating that the precursor producers were with heavy cost pressure or even suffered losses constantly.
Source: Mysteel
In response to the shrinking market share and poor profits, domestic ternary players have plans to go overseas to seek new growth, while the domestic projects have been postponed.
In 2025, a number of overseas ternary precursor projects funded by domestic companies are likely to come on stream in countries like Indonesia, South Korea, and Morocco. And the precursor supply is projected to show an annual growth of 60,000 tonnes.
For ternary cathode materials, new projects can be expected in South Korea and Finland, contributing around 40,000 tonnes new supply.
Written by Aggie Hu, huchenying@mysteel.com
