It is estimated that China's ternary cathode material prices will move up in February primarily due to firm cost support, especially when the cathode factories have already slightly raised their offers towards the battery cell manufacturers, Mysteel's survey showed.
China's ternary cathode material was challenged by poor transactions and high cost ahead of the Chinese New Year (CNY) holiday. The high cost was partly caused by the uncertainties centering the mining quotas approvals of the Indonesian government, which kept the MHP prices at a high level. While the lithium carbonate prices were relatively stable, the ternary cathode factories suffered losses due to resilient prices of nickel sulfate.
On the other hand, the demand from the battery cell manufacturers was lackluster in the face of accumulating inventory and poor orders from the end-market. And the cell manufacturers therefore put more efforts on high-nickel ternary cathode as the price war over low-end products has been intensive.
During the CNY holiday, the news of the United States' proposed additional tariffs on China, Canada, and Mexico had a significant impact on the sentiment of the futures and spot markets, as well as market expectations. Before the holiday, there were expectations for further growth in ternary cathode materials demand in the overseas market by 2025. However, news of additional tariffs triggered concerns overs the development of electric vehicles (EVs) in Europe and the United States, leading to a downward revision of the production and sales expectations for overseas EVs in 2025.
Looking ahead, the nickel sulfate prices are expected to maintain momentum, offering cost support to medium and high-nickel ternary cathode materials when cobalt sulfate and lithium carbonate prices are projected to move rangebound in the near term.
In addition, the cathode factories will prioritize inventory control and arrange the production based on the orders received as the market situation has not yet shown substantial improvement, though the demand is likely to pick up slightly in January-February 2025 compared with the same period last year.
In the short period, the end-market demand will likely weaken seasonally post the CNY holiday, while the ternary cathode material gains support from low finished product inventory and firm nickel sulfate prices.
In response, the cathode factories rely on long-term orders for raw material supply and stop purchasing on the spot market, and raise their offers towards the battery cell manufacturers.
Taken together, it is likely that the ternary cathode material prices will show momentum through February.
Written by Aggie Hu, huchenying@mysteel.com
