A Glance of China Lithium-ion Battery Materials Week 3, May 2023

↘ Nickel Sulfate prices are likely to weaken in the coming week.

The demand for nickel sulfate from downstream ternary precursor companies has not shown significant growth, leading to some nickel sulfate companies lowering prices; however, the decrease in nickel intermediate product prices is relatively small recently, resulting in companies increasing production cuts. When the current supply and demand for nickel sulfate are both weak, nickel intermediate product prices are likely to decline with the continued increase in the supply, affecting the downward trend of nickel sulfate prices.

↗  Cobalt sulfate prices are expected to grow in the short term.

At the beginning of the last week, overseas prices continued to decline, failing to provide immediate support to spot prices, resulting in few trading activities and merely some buyer-initiated price negotiations; however, smelters, considering the difficulty in finding low-priced raw materials, are not willing to sell below Yuan 34,000/tonne. Towards the end of the week, some companies showed signs of replenishment, prompting smelters to raise prices, with mainstream smelters offering prices up to 36,000 yuan/ton, shifting the cobalt sulfate prices towards a stronger trend.

--  Lithium compound prices may remain stable at a high level in the near future.

Lithium carbonate prices have continued to rise in recent days, with active trading and auction prices for industrial-grade lithium carbonate reaching as high as Yuan 251,000/tonne, further fueling market sentiment, and leading to increased spot orders. With the relatively intense buying and selling intentions from both upstream and downstream players, it is expected that lithium compound prices will remain at a high level in the short term.

↘  The prices of ternary precursors are anticipated to decline in the following days.

Downstream demand has stopped declining but has yet to show signs of recovery, leading to weak demand for raw materials and price declines against raw material oversupply, coupled with pressure from downstream cell producers to lower prices of nickel, cobalt, and manganese materials, indicating that there is still room for a further decline in the prices of ternary precursor materials.

↘  Ternary cathode prices may decrease in the coming week.

The demand for ternary cathodes shows stabilization in downstream cell producers, with a slight increase in demand for 5-6 series products but a decline in demand for 8 series products, resulting in overall demand not showing significant improvement. Leading ternary cathode companies remain concerned about future demand and are cautious in their lithium compound procurement, leading to no considerable increase in demand. Currently, the purchasing of lithium compounds for ternary cathodes is below market prices, indicating that there is still room for lithium compound prices to decline in the future.

Lithium iron phosphate (LFP) prices outlook

The demand for lithium iron phosphate (LFP) cathode materials has improved, leading to increased orders and operating rates; however, LFP material manufacturers are still proactively destocking and may not increase production in the short term. The rapid increase in spot prices of lithium carbonate during the week has put pressure on LFP production, but there is a significant gap between the material factories' expectation and the spot prices, while other raw material price decline brings small profit recovery for LFP. The stable growth of the energy storage market provides good demand support for the LFP market.

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