Nickel Sulfate
China's nickel sulfate production stood at 179,800 tonnes in May, or 39,600 tonnes in Ni. content, down 4.57% month on month (MoM) according to Mysteel survey. The production consisted of 0% nickel briquette/powder, 62.66% MHP, 27.3% high-grade nickel matte, and 10.03% secondary nickel by raw material.
The production cut was primarily due to falling demand from ternary precursor companies, which focused on destocking in May, in addition to the short supply of raw materials.
China's nickel sulfate production is likely to fall 2.3% MoM and total 38,700 tonnes in Ni. content in June amidst persistent weakness in the precursor sector. Nevertheless, the nickel consumption in the nickel plate sector is projected to maintain momentum due to moderate profitability. It is likely that around 9,200 tonnes nickel sulfate will be used to produce nickel plate.
Cobalt Sulfate
China's cobalt sulfate production was 25,768 tonnes in May 2024, a month-on-month decrease of 5.28% and a year-on-year increase of 17.44%. The cumulative production of cobalt sulfate in May rose 18.24% YoY at 124,578 tonnes.
In May, the demand for cobalt sulfate continued to decline. Smelters' inventory accumulated due to the poor shipments. Top-tier smelters still focused on the delivery of long-term orders, and small and medium-sized enterprises had to negotiate the orders one by one. Overall, the transactions on the market were poor. An enterprise in South China experienced a significant decline in production due to falling orders. Taken together, the May production dropped compared with April.
The cobalt sulfate production is estimated at 26,000 tonnes in June, an increase of 6.6% MoM and 32.17% YoY. The downstream demand in June is still moderate. Under the expectation of a production reduction, smelters are under greater pressure to sell, and there are few transactions with precursor companies. In addition, some companies which have stopped the production for maintenance plan to postpone the production resumption. But a company in Hubei Province has newly commissioned. Hence it is expected that there will be a slight increase in cobalt sulfate production.
Cobalt Chloride
China's cobalt chloride production was up by 14.49% MoM or 114.49% YoY at 21,648 tonnes in May 2024. The cumulative production of cobalt chloride over January-May totaled 92,893 tonnes, an increase of 83.65% year-on-year.
After the Labour Day holiday, the orders taken by top-tier enterprises increased slightly, but the demand increase in the electronics sector was less than expected. And the Co3O4 factories were not in a hurry to purchase and building stocks. At the same time, with the stability of the cobalt chloride-electrolytic cobalt production lines, the demand for cobalt chloride has gradually stabilized, resulting in a steady increase in cobalt chloride production in May.
China's cobalt chloride production is projected to rise 6.25% compared to the previous month at 23,000 tonnes in June, when there is no significant improvement in downstream demand, namely Co3O4 and LCO. The top-tier enterprises maintain stable production scheduling. However, the overall demand on the market is soft, and market players mainly purchase on dips, making it difficult to boost the trading volume. Nevertheless, a company in Hubei Province is about to start production, with a capacity of 10,000 tonnes/year. It is expected that there will be a certain increase in overall production in June.
Lithium Carbonate
China's lithium carbonate production totaled 62,100 tonnes in May (Mysteel newly added two lithium smelters to the sample library, each with a capacity of 30,000 tonnes/year), rising 27.9% month on month, per Mysteel survey. The old survey sample reported a combined production of 59,100 tonnes, up 21.7% MoM.
The increase was attributed to the seasonal production ramp-up in Qinghai Province, and the rising capacity utilization rates in Jiangxi Province after the impact of environmental protection faded. The tollers in Hebei Province also maintained high operating rates.
It is expected that China's lithium carbonate production will rise 3.8% MoM at 64,500 tonnes in June (new survey sample, or up 4% MoM at 61,500 tonnes under old survey sample) as some smelters have scheduled to raise the production to pre-sell products for 08 futures contract. Nevertheless, some smelters have plans to take overhaul in Sichuan Province.
Lithium Hydroxide
China's lithium hydroxide production stood at 23,100 tonnes in May, down 0.3% MoM, per Mysteel survey. The production was little changed in May with top-tier smelters maintaining high capacity utilization rates to deliver the long-term orders.
It is likely that China's lithium hydroxide production will fall 3.9% MoM at 22,200 tonnes in June primarily due to falling orders from the ternary battery sector, in addition to some smelters taking maintenance. But some new lithium hydroxide production lines in Jiangxi Province are likely to ramp up, slightly offsetting the production cut.
Ternary Precursor
The production of China's ternary precursors was 63,700 tonnes in May 2024, a month-on-month decrease of 15.97% and a year-on-year increase of 5.71%.
In May, there was a significant production cut of domestic ternary battery cells, and some companies focused on destocking, forcing the upstream producers to curtail the production as well. Although overseas orders have slightly recovered, the overall demand still weakened.
The production of ternary precursors is estimated at 58,900 tonnes in June, a decrease of 7.49% MoM and 18% YoY. The top-tier ternary battery cell enterprises are projected to continue to reduce the production, Mysteel survey showed.
Ternary Cathode Material
The production of China's ternary cathode materials reached 51,000 tonnes in May 2024, a month-on-month decrease of 18.7% and a year-on-year increase of 15.51%. In May, the top-tier cathode material companies mostly focused on destocking. Coupled with a continuous decline in downstream demand, the production of ternary cathode materials staged a significant reduction.
China's ternary cathode materials production is estimated to be 49,600 tonnes in June, a decrease of 2.75% MoM and an increase of 1.83% YoY. The downstream demand has been declining continuously, and the producers will change the production scheduling according to the battery plants' order default.
Cobalt Powder
China's cobalt powder production was 850 tonnes in May 2024, a month-on-month decrease of 1.05% but a year-on-year increase of 17.89%. From January to May, the cumulative production of cobalt powder was 4,099 tonnes, rising 15.95% compared with last year.
In May, the mainstream cobalt powder plants mostly maintained normal production. At the same time, the demand for downstream hard alloys improved, and the transactions on the market were relatively active. The orders received by top-tier enterprises were relatively sufficient, thus operating at full capacity. The overall cobalt powder production in May was relatively stable.
The cobalt powder production is expected to be 870 tonnes in June 2024, rising 2.35% compared to the previous month. At present, the demand for hard alloy is flat, and downstream procurement has slowed. Except for top-tier manufacturers, the orders received by small and medium-sized enterprises are fewer. However, it is expected that cobalt powder factories will maintain their production to deliver the orders on hand, and the overall production of cobalt powder will not change much.
Electrolytic Cobalt
China's electrolytic cobalt production was 3,295 tonnes in May 2024, a month-on-month increase of 18.31% and a year-on-year increase of 117.49%. From January to May, the cumulative electrolytic cobalt production reached 13,959 tonnes, an increase of 120.35% YoY.
In May, the demand of electrolytic cobalt improved, and the manufacturers received enough orders, allowing them to produce at full capacity. Meanwhile, a smelter's Phase II project in East China was put into operation, and the production has significantly increased after trial operation. Generally, the high production in May was supported by the manufacturers maintaining high capacity utilization rates.
China's electrolytic cobalt production is expected to reach 3,500 tonnes in June 2024, with a MoM increase of 6.22% and a YoY increase of 108.33%. The electrolytic market shows weakness in June. The demand for high-temperature alloys is relatively soft. But the manufacturers' operating rates remain at a normal level and they also maintain normal shipments. It is expected that the electrolytic cobalt production will steadily increase in June.
Co3O4
China's Co3O4 production totaled 8,300 tonnes in May 2024, a decrease of 2.01% month-on-month and a year-on-year increase of 67.85%. The cumulative production from January to May stood at 39,490 tonnes, rising 63.05% YoY.
In May, with the recovery of consumption in the electronics sector, both downstream production and demand increased slightly, and most Co3O4 producers maintained stable production. Only a few downstream enterprises reduced the orders, resulting in a slight decrease in total Co3O4 production. At present, the finished product inventory of Co3O4 was relatively low, with the capacity utilization rate maintained at 67.85%.
It is expected that China's Co3O4 production will be 8,450 tonnes in June, increasing 1.81% MoM and 16.55% YoY. The demand from the electronics sector will keep stable in June, with most producers maintaining their production at current levels, while some companies will resume the production.
LCO
China's LCO production rose to 8,380 tonnes in May 2024, an increase of 1.09% month-on-month and 49.64% year-on-year. In May, the demand for digital products continued to recover, and there was a certain inventory of downstream battery cells production. Therefore, the demand for LCO remained stable, and the increase was fractional.
China's LCO production is expected to be 8,430 tonnes in June 2024, an increase of 0.6% month-on-month and 19.4% year-on-year. The growth of the downstream demand has been slow. However, LCO enterprises are likely to maintain the production as the costs have decreased due to the decline in lithium carbonate prices.
LFP
China's LFP production was down 4.0% MoM at 205,700 tonnes in May. The production was slightly better in the first half promoted by the on-grid demand in the energy storage field, and weakened in the second half. And the monthly fall was partly due to a high base in April, when the production surged 34.09% MoM at 214,200 tonnes.
It is likely that China's LFP production will edge down 0.58% MoM at 204,500 tonnes in June as the electric vehicle market kicks off the dull season, and the battery cell factories will purchase on demand. In addition, the half-year production rush will come to an end.
Anode
The anode material production of mainstream producers stood at 114,500 tonnes in May, rising 39.08% MoM primarily because most top-tier producers produced at full capacity. In addition, most producers built stocks after depleting the high-priced raw materials. The producers were active in the face of low industrial inventory pressure, coupled with robust electric vehicle sales in May.
It is likely that China's anode material production will rise further by 4.24% MoM at 119,300 tonnes in June.
LiPF6
China's LiPF6 production rose 1.54% MoM at 13,200 tonnes in May, thanks to rising orders from battery cell factories, which lifted the production of electrolyte.
The production is projected to fall 4.54% MoM at 12,600 tonnes in June, amidst the slight production cut among battery cell factories. And the LiPF6 producers are projected to schedule the production based on the orders received.
Electrolyte
China's electrolyte production of mainstream producers totaled 12,000 tonnes in May, up 7.37% MoM. The production increase was allowed by rising orders from battery cell factories, and the electrolyte producers ramped up the capacity utilization rates.
It is projected that China's electrolyte production is projected to inch down 3.92% MoM at 98,000 tonnes in June as the battery cell factories are likely to reduce the production, thus slashing the demand for electrolyte.
