Nickel Sulfate
China's nickel sulfate production stood at 177,400 tonnes in June, or 39,000 tonnes in Ni. content, down 1.34% month on month (MoM) according to Mysteel survey. The production consisted of 0% nickel briquette/powder, 49.67% MHP, 37.44% high-grade nickel matte, and 12.9% secondary nickel by raw material.
Despite an increase in overseas demand in June, the overall demand for the ternary industry chain decreased due to falling demand from ternary precursor companies, which focused on destocking. As a result, the price of nickel sulfate continued to decline.
China's nickel sulfate production is likely to fall 4.76% MoM and total 37,200 tonnes in Ni. content in July. Despite an earlier increase in demand for nickel plate production, which slowed the overall decline in production, subsequent inverted profit margins and reductions in deliveries and have led some companies to cut production. Therefore, China's nickel sulfate production is expected to decrease in July, and it is likely that around 10,675 tonnes of nickel sulfate will be used to produce nickel plate.
Cobalt Sulfate
In June 2024, China's cobalt sulfate production totaled 22,760 tonnes, with a MoM decline of 11.67% and a YoY drop of 22.42%. From January to June, the total production accumulated at 147,338 tonnes, rising 9.39% compared to last year.
In June, the purchasing atmosphere of downstream enterprises was poor and orders of large-sized enterprises decreased gradually. Under the off-season market atmosphere, small and medium-sized smelts have proactively lowered their prices, and that of recycled materials products have reached a new historic low. In addition, the overseas intermediate product prices remained stable, without providing cost support to domestic and foreign smelters. Thus, there were few market inquires and transactions in June. Therefore, some enterprises gradually stopped reducing production due to the impact of the sluggish market and the production in June decreased slightly.
In July 2024, China's cobalt sulfate production is estimated to 21,808 tonnes, increased by 4.18% MoM and dropped 33.91% YoY. Both buyers and sellers seem to agree that the price has entered a low point, the weakness of downstream orders directly affects the sales growth of most enterprises. The demand for power and digital market is still lackluster, and the bearish sentiment of intermediate product prices has not been alleviated yet, leading to poor transaction negotiations. It is expected that cobalt sulfate production will continue to decline slightly in July.
Cobalt Chloride
In June 2024, China's Cobalt chloride production stood at 23,643 tonnes, with a MoM increase of 9.22% and a YoY rising of 94.19%. The production from January to June totaled 116,536 tonnes, rising 85.69% to 2023.
In June, downstream LCO plants maintained stable demand for raw material procurement, with top-tier companies delivering orders normally and high operating rates. It is rumored that a plant in South China has stopped production due to the accumulation of initial inventory, but overall cobalt chloride production increased slightly in June.
In July 2024, China's Cobalt chloride may reach 24,043 tonne, up 9.22% MoM. With the improve of the downstream demand, the overall production capacity utilization rate of downstream Co3O4 and LCO has increased. Downstream demand for cobalt chloride procurement is mainly long-term orders, with a low cobalt chloride inventory. In addition, the release of individual plants' production capacity has led to a slight increase in the operating rate in July.
Lithium Carbonate
China's lithium carbonate production totaled 67,000 tonnes in June, an increase of 7.8% MoM. The increase was attributed to the seasonal production rise in Qinghai Province, the completion of production line maintenance in Sichuan Province, and higher operating rates in Jiangxi Province after the impact of environmental protection faded. Despite minor reductions in recycling and contract smelters, the overall production of lithium carbonate increased by 7.8% compared to the previous month.
It is expected that China's lithium carbonate production will fall 2.1% MoM at 65,000 tonnes in July. Due to the current inverted price and cost, some production smelters are likely to reduce their production and even reduce contract manufacturing orders in July.
Lithium Hydroxide
China's lithium hydroxide production stood at 23,100 tonnes in June, up 6.5% MoM, according to Mysteel survey. The production slightly increased in May with smelters maintaining high capacity utilization rates for stocking.
China's lithium hydroxide production will likely fall 3.2% MoM at 23,800 tonnes in July. Despite the expected slight increase in ternary precursor production and the high proportion of customer supply on the demand side, the overall production of Lithium Hydroxide in July is anticipated to decline due to the continued price inversion of lithium carbonate and lithium hydroxide, coupled with a reduction in some contract manufacturing orders.
Ternary Precursor
In June 2024, China's ternary cathode materials production reached 47,400 tonnes, with a drop of 6.93% MoM and 2.55% YoY. In June, China's ternary cathode material plants continued to reduce their inventory, resulting in a continuous decline in production.
In July 2024, China's ternary cathode materials production is expected to be at 58,600 tonnes, a month-on-month increase of 23.47% and a year-on-year increase of 10.43%. Some top-tier battery cell companies and ternary material companies have finished restocking in July due to the relatively low prices of nickel, cobalt and lithium, resulting in a significant increase in production.
Ternary Cathode Material
In June 2024, China's ternary precursors production was 62,900 tonnes, a decrease of 1.24% month on month and a year-on-year decrease of 12.46%. In June, China's ternary industry chain continued to be destocking, but overseas demand was increasing with the upcoming mass production of 4680 battery cells. However, overall demand was still declining.
The estimated production of China's ternary precursors in July 2024 is 68,400 tonnes, an increase of 8.78% month on month and a decrease of 13.67% YoY. In July, a top-tier enterprise may increase its production due to the recent relatively low prices and they start restocking.
Cobalt Powder
In June 2024, China's cobalt powder production was 830 tonnes, a decrease of 2.35% MoM and a year-on-year increase of 13.39%. The production from January to June accumulated 4,929 tonnes, up 15.51% compared to last year.
In June, the mainstream cobalt powder factories started operating at full capacity, but the demand for downstream hard alloys of cobalt powder in June was relatively calm, and some manufacturers had few orders, resulting in a slight reduction in production. At the same time, some cobalt powder factories temporarily stopped producing cobalt powder and turned to producing cobalt salts and other products. Therefore, the overall cobalt powder production decreased slightly in June.
In July 2024, China's cobalt powder production may reach 850 tonnes, rising 2.41% on month. At present, the demand for the downstream hard alloy is poor, with limited purchases. However, orders for top-tier manufacturers are sufficient, and they can basically maintain stable production scheduling. It is expected that the overall production of cobalt powder will not change much in July.
Electrolytic Cobalt
In June 2024, the China's electrolytic cobalt production was up to 3,955 tonnes, with a MoM increase of 8.21% and a YoY rising of 135.42%. In June, cobalt production remained normal and the output steadily increased. The downstream demand was slightly average, and manufacturers had much pressure on the shipments, with a few orders. However, a factory in East China has officially put into production and started operating at full capacity this month, after a trial operation last month. At the same time, the cost support for electrolytic cobalt id firm, and some manufacturers have added the production, which has increased the total production to a certain extent. The total production of electrolytic cobalt in June has significantly increased.
It's likely that China's electrolytic cobalt production is to reach 4,000 tonnes in July 2024, with a month-on-month increase of 1.14% and a year-on-year increase of 118.58%. The overall trend of the electrolytic cobalt market in July is weak. Apart from maintaining normal shipments, it is difficult for downstream demand to improve significantly. It is expected that the electrolytic cobalt production in July will maintain stable.
Co3O4
In June 2024, China's Co3O4 production totaled 8,900 tonnes, rising 7.23% MoM and 22.76% YoY. The production of Co3O4 in the first six months was 46,790 tonnes, a cumulative year-on-year increase of 48.68%. In June, the upstream and downstream demand remained stable, digital products orders were mainly between top-tier enterprises, and Co3O4 enterprises kept normal production. Meanwhile, the price of cobalt chloride has dropped to a temporary bottom, and some companies accumulated some inventory. Thus, the production of Co3O4 showed a slight increase in June.
The production of China's Co3O4 is expected to reach 8,900 tonnes in July 2024, which is stable on n month and an increase of 13.45% on year. In July, the demand for 3C digital products dropped, LCO and Co3O4 enterprises relied on orders from old customers, and their operating rates remained stable compared to the previous month. It's estimated that the production of Co3O4 will remain stable in July.
LCO
In May 2024, China's LCO production went down 0.93% MoM at 8,380 tonnes. The demand for downstream digital orders remained stable in June, with limited new orders and small shipments from small and medium-sized enterprises. Meanwhile, there is still room for a decrease in the price of raw material Co3O4.
In July 2024, market players mostly hold a bearish sentiment in the LCO market due to the traditional off-season market. Although some companies have added some new orders, overall demand is difficult to increase, and it is expected that production in July will remain unchanged compared to the previous month.
LFP
China's LFP production was down 7.0% MoM at 196,000 tonnes in June. The demand in the end market did not meet expectations in June, and the reduction in energy storage orders further slowed down the consumption of battery cell inventory downstream. Therefore, some battery manufacturers reduced their procurement of LFP.
It is likely that China's LFP production will fall 0.38% MoM at 195,300 tonnes in July. And LFP smelters will produce according to orders, with overall demand remaining relatively stable.
Anode
The anode material production of mainstream producers was approximately 112,700 tonnes in June, representing a decrease of 1.58% MoM and an increase of 10.71% YoY. In June, the overall market supply remained ample as most top-tier producers continued to expand their overseas business actively, coupled with relatively high operating rates.
Although the downstream digital battery market is temporarily in an off-season, the overall inventory pressure in the anode materials market was relatively low. It is likely that China's anode material production will rise further by 1.51% MoM at 114,400 tonnes in July.
Separator
China's lithium-ion battery separator production stood at 1.73 billion sq.m. in June, rising 4.78% MoM. The production consisted of around 430 million sq.m. dry process separator (PP) and 1.3 billion sq.m. wet process separator (PE). It is expected that China's separator production will rise 1.16% MoM at 1.75 billion sq.m. in July.
