A Glance of China Lithium-ion Battery Materials Week 2, Mar 2023
As of 2022, the public data shows that the market share of pure electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) combined in the US is approximately 7%. This is in contrast to China and the EU, where the market share for these types of vehicles has exceeded 25% and 20%, respectively.
In the recent five years, Chinese battery players have been proactively expanding their global presence by entering more markets and investing in raw materials exploitation. The #IRA act will make countries that have #FTAs with the US more competitive in their lithium supply, but it is not expected to have a material impact on China's minerals supply until 2025. Though China is predominant in most key battery processing capacities and graphite production, it will face more competition sooner or later. To better team up with Indonesia (the main nickel supplier) and the Democratic Republic of Congo (DRC, the main cobalt supplier), which are not covered in the US FTAs, will help gain some competitive edge for Chinese battery producers, e.g., to produce more high-nickel-content ternary lithium batteries.
▼ Lithium Compounds
lithium compounds prices are expected to continue falling.
Lithium carbonate supply fell with an operating rate of 68% last week. Production was reduced due to mine shutdowns in Jiangxi and outages of some plants.
Downstream producers are currently prioritizing inventory depletion and on-demand procurement, resulting in limited trading activities and a stagnant market.
--Nickel Sulfate
It is expected that nickel sulfate prices will remain relatively stable this week, possibly declining.
Negotiations between buyers and sellers of nickel sulfate have failed to reach a consensus, resulting in some nickel sulfate companies planning to reduce production due to high inventory pressure. Overall demand from the ternary materials has remained unchanged, without notable improvements.
--Cobalt Sulfate
A slight decrease in the price of cobalt sulfate is anticipated in the near future.
Global cobalt supply is abundant, but cobalt sulfate production has declined and operating rates remain low.
Downstream enterprises are currently only making purchases based on rigid demand, resulting in an oversupply of cobalt sulfate in the market. This is expected to limit support for price increases in the short term.
On the cost side, cobalt mining companies are hesitant to lower their prices, thereby supporting the current cobalt sulfate prices.
-- Manganese Sulfate
Manganese sulfate prices are expected stable in the short term.
The manganese sulfate market is relatively well-supplied while downstream demand for ternary precursors from downstream cell manufacturers has not shown a clear recovery.
▼Ternary Cathode Materials
Ternary cathode materials prices are expected to remain weak with a risk of decline due to low demand and bearish market sentiment.
As lithium compounds prices continue to decline, current purchases of ternary cathode materials by manufacturers are primarily driven by immediate demand. Demand from NEV and 3C markets, especially for mid-to-low-nickel-content materials, is sluggish. Cell producers are showing limited interest in procuring ternary materials while downstream users are adopting a fence-sitting attitude with weak proactiveness in RFQs when sellers are holding firm on their list prices.
▼ LFP Cathode
It is anticipated that LFP and LFP Cathode prices will lose some ground next week.
Due to the continual decline in lithium compounds prices, there is insufficient price support for LFP prices. Downstream cell producers are prioritizing inventory depletion with cautious procurement and limited trading activities. Currently, the operating rate of LFP Cathode manufacturers remains at a mid-range level. Both supply and demand are weakened.
Significant price fluctuations in the market are not expected in the short term.
The current market is still in the off-season for consumer consumption, and it will take some time for downstream demand to recover, even as second-quarter orders commence negotiations.
-- Graphitization cost
Prices are expected to remain low in the short term.
There is severe overcapacity and intense competitions in the graphite processing market, resulting in low prices. The prevailing deal prices are around 13,000 yuan/tonne, making the lowest in the past three years and approaching to the cost line.
-- Electrolyte
The electrolyte prices are expected to remain weak and stable in the short term.
Downstream demand remained lackluster last week, resulting in fewer trading activities. Manufacturers are mainly consuming existing inventory, with a focus on fulfilling long-term orders. While leading electrolyte manufacturers have increased their operating rates, second-tier manufacturers are operating at a low capacity.
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