Nickel Sulfate
According to Mysteel new survey sample, China's nickel sulfate production was 155,000 tonnes in physical content, or 34,100 tonnes in Ni. content in March, rising 16.54% month on month (MoM). The production consisted of 0.44% nickel briquette/powder, 68.28% MHP, 23.58% high-grade nickel matte, and 9.19% secondary nickel by raw material.
The production growth was powered by rising end-market demand, most of which was contributed by integrated producers with cost advantages. Some producers purchased high-priced MHP due to tight supply in order to maintain the production, leading to poor profitability. In this case, some producers purchased nickel briquette/powder to control the cost. Nevertheless, the secondary nickel-based nickel sulfate producers reduced the production for losses.
It is expected that the nickel sulfate production will grow further by 9.19% MoM at 37,200 tonnes in Ni. content in April.
Cobalt Sulfate
In March 2024, China's cobalt sulfate production totaled 23,381 tonnes, an increase of 14.49% MoM and a year-on-year drop of 4.27%. The cumulative production of cobalt sulfate over January-March was 70,332 tonnes, a year-on-year increase of 12.57%.
In early March, the downstream enterprises rarely made inquiries, with smelters mainly supplying long-term orders. Mainstream cathode active material plants were able to maintain production on existing in-plant raw material stocks. By mid-March, the smelters in Zhejiang and Jiangxi gradually raised the production on recovering downstream demand. At the end of March, with the transparency of imported raw materials prices, the cobalt salt prices showed signs of falling, putting pressure on the smelters, especially when the power battery demand was yet to revive.
It is expected that the cobalt sulfate production will be 27,000 tonnes in April 2024, rising 22.13% month on month and a year-on-year increase of 28.96%. On the demand side, it is found that the demand for power battery has been improving steadily, with a slight increase in the production scheduling. But the contribution from the electronics market is limited. Therefore, it is expected that the overall cobalt sulfate demand will be relatively stable in April.
Manganese Sulfate
China's battery grade manganese sulfate production reported 11,300 tonnes in March, up 0.8% MoM but down 57.4% YoY. The production rose slightly thanks to the slow recovery of downstream ternary precursor sector, and the manganese sulfate smelters arranged the production based on the orderbook.
It is expected that China's battery grade manganese sulfate production will edge up by another 0.8% MoM at 11,400 tonnes in April with several smelters reporting slightly rising production after resuming normal production. There heard no production cuts from downstream ternary precursor producers, hence the demand for manganese sulfate is projected to stay flat.
Cobalt Chloride
In March 2024, China's cobalt chloride production stood at 23,140 tonnes, a month-on-month increase of 62.45% and a year-on-year increase of 120.86%.
In early March, the rising prices of intermediate products boosted the sentiment of smelters, which lifted the production especially when the actual profitability of cobalt chloride was slightly higher than that of cobalt sulfate. Most smelters in East China reported rising production. However, the downstream and end-users mainly held a wait-and-see mood. The mild stockpiling activities of Co3O4 and LCO slightly boosted the demand for cobalt chloride. Generally, the cobalt chloride production increased significantly in March, which may become inventory.
China's cobalt chloride production is estimated at 18,000 tonnes, a decrease of 18.58% in April 2024, compared to the previous month. After the Qingming holiday, the market demand has slightly declined. Coupled with the raw material prices falling in some mining enterprises, the market players are increasingly bearish, which may lead to a decrease in the operating rates of smelters. It is expected that production will slightly decline in April.
Lithium Carbonate
China's lithium carbonate production reported 44,500 tonnes in March, rising 20.9% month on month, per Mysteel survey. The production in Jiangxi Province jumped with the smelters resuming the production, but the recovery was slower than expected. In Sichuan Province, the total production was flat with new production lines ramping up and several smelters carrying out maintenance. Qinghai Province reported rising production amid warming weather conditions. The recycling plants also resumed the production in March, contributing to the production growth.
It is expected that the lithium carbonate production will rise to 51,500 tonnes in April, up 14.6% MoM, primarily because the smelters in Jiangxi are projected to fully resume the production from environmental inspection, in addition to the commissioning of new spodumene-based production lines.
Lithium Hydroxide
China's lithium hydroxide production stood at 21,600 tonnes in March 2024, rising 18.8% MoM, primarily because the downstream demand picked up with the depletion of supplies under long-term orders.
It is expected that China's lithium hydroxide production will rebound 4.1% MoM at 22,500 tonnes in April, boosted by rising lithium hydroxide prices along with bullish lithium carbonate, and resilient downstream demand in April.
Ternary Precursor
In March 2024, the production of China's ternary precursors reached 61,100 tonnes, a jump of 22.32% MoM and 2.52% YoY. In March, the demand recovered amid the stockpiling of carmakers. Enterprises without advantages in raw materials and supply chains suffered serious losses due to fierce competition, which led to significant changes in their market share.
The production of ternary precursors is estimated at 65,800 tonnes in April, up 7.73% MoM and 13.29% YoY.
Ternary Cathode Material
In March 2024, the production of China's ternary cathode materials reached 54,000 tonnes, an increase of 26.49% MoM and 20.29% YoY. In March, the demand for ternary cathode materials increased with the stocking of downstream carmakers, especially Xiaomi and AITO. The demand recovery may slow down after the carmakers finish building stocks.
The production of ternary cathode materials is estimated at 55,400 tonnes in April, rising 2.61% MoM and 30.08% YoY.
Cobalt Powder
In March 2024, China's cobalt powder production reached 855 tonnes, a month-on-month increase of 25.92% and a year-on-year rising of 19.08%. The production amounted to 2,390 tonnes over January-March, rising 14.03% year-on-year.
In March, the mainstream cobalt powder factories maintained normal production, although the downstream demand was lackluster. However, there were also a few companies suspending the production of cobalt powder, but the impact on overall production was weak.
The cobalt powder production is expected to be 870 tonnes in April 2024, an increase of 1.75% compared to the previous month. At present, the smelters still maintain normal production, but the downstream demand is unlikely to improve significantly, resulting in limited transactions. The top-tier smelters operate at full capacity with sufficient orders. It is expected that there will be a slight increase in overall cobalt powder production in April.
Electrolytic Cobalt
In March 2024, China's electrolytic cobalt production was 2,635 tonnes, a month-on-month increase of 8.44% and a year-on-year increase of 104.26%. From January to March, a total of 7,879 tonnes of electrolytic cobalt were produced, with a cumulative month-on-month increase of 135.9%.
In March, overseas demand for electrolytic cobalt was flat, and the transactions on the European market were mostly small orders. In China, the end-market demand was muted as well, but the smelters were generally at full capacity, boosting the overall production. In addition, a smelter in East China put two production lines into operation, resulting in a significant increase in the production.
The electrolytic cobalt production is expected to reach 2,800 tonnes in April 2024, a month-on-month increase of 6.26% and a year-on-year increase of 89.19%. It is expected that the electrolytic cobalt market sentiment will be flat in April, and there is currently no significant improvement in the downstream demand. And the downstream players have been silent except for on-demand purchasing. However, many smelters will continue to maintain normal production on moderate profits. Hence it is expected that electrolytic cobalt production will increase slightly in April.
Co3O4
In March 2024, China's production of Co3O4 was 7,480 tonnes, a rise of 40.34% MoM and an increase of 48.12% YoY. In March, as the demand and new orders improved at the beginning of the month, the Co3O4 producers' operating rates increased. However, the demand for electronics was still weak, and the downstream enterprises were not interest in building stocks of Co3O4. Nevertheless, most smelters basically resumed the production in March, resulting in an increase in the production of Co3O4.
It is expected that the production will reach 7,500 tonnes in April, a month-on-month increase of 2.67%. The overall market situation may remain weak in April, with LCO enterprises cautious in purchasing in the face of decent inventory built in the early stage. Nevertheless, the top-tier producers still operate according to their orders, with high operating rates. It is expected that the production of Co3O4 in April may be stable with mild increase.
LCO
In March 2024, China's LCO production was 8,100 tonnes, an increase of 51.97% MoM and 60.40% YoY. In March, smelters mostly have resumed production.
The smelters resumed the production extensively in March from the Chinese New Year holiday in February, lifting the overall production, coupled with the new orders from the downstream players and a top-tier smelter significantly raised the production. The downstream battery manufacturers ramped up the stockpiling of raw materials.
It is expected that LCO production will remain stable in April as the downstream players may slow the stockpiling pace in the face of modest in-plant raw material stocks and volatile cobalt and lithium prices.
LFP
China's LFP production totaled 159,800 tonnes in March, up 41.54% MoM. The production gained momentum from the extensive stockpiling needs in the energy storage market, in addition to a low base in February.
Mysteel expects China's LFP production to rise 24.84% MoM at 199,500 tonnes in April, due to booming demand in the end-market. Meanwhile, projects that newly commissioned in April will bring additional production. And the energy storage market is projected to keep outperforming the power battery sector.
Anode
China's anode production stood at 77,230 tonnes in March, up 9.19% MoM but down 23.08% YoY. The production growth was powered by the producers resuming the production from holiday, coupled with active bids/offers. Some new projects passed the environmental impact assessment, potentially lifting the total capacity. The production scheduling of downstream battery cell factories improved as well, leading to rising demand for anode.
It is expected that China's anode material production will rise 6.56% MoM at 82,300 tonnes in April.
Separator
China's lithium-ion battery separator production stood at 1.433 billion sq.m. in March, a monthly increase of 36.35%. The production consisted of 0.433 billion sq.m. dry process (PP) separator and around 1 billion sq.m. wet process (PE) separator.
It is expected that China's battery separator production will rise 4.68% MoM at 1.5 billion sq.m. in April.
Written by Aggie Hu, huchenying@mysteel.com
