Nickel Sulfate
China's nickel sulfate production stood at 178,000 tonnes in July, or 39,200 tonnes in Ni. content, up 0.33% month on month (MoM) according to Mysteel survey. The production comprised 0% nickel briquette/powder, 56.05% MHP, 34.69% high-grade nickel matte, and 9.1% secondary nickel by raw material.
Despite reduced output from some nickel sulfate producers due to limited profits, the increase in nickel sulfate production primarily stemmed from rising demand in China. Additionally, integrated enterprises with a raw material advantage increased nickel plate production after earlier hedging, while some companies expanded capacity by introducing new lines to produce nickel plates, resulting in a significant rise in nickel plate output.
China's nickel sulfate production is likely to fall 0.62% MoM and total 38,900 tonnes in Ni. content in August, and it is expected that around 12,300 tonnes of nickel sulfate will be used to produce nickel plates. Although nickel intermediate raw material prices remain firm, spot nickel sulfate producers see little profit growth. Combined with limited demand increases for pure nickel, nickel sulfate supply is unlikely to increase significantly in the third quarter.
Cobalt Sulfate
China's cobalt sulfate production totaled 22,155 tonnes in July, with a MoM decline of 2.66% and a YoY drop of 32.85%. The production totaled 169,493 tonnes over January-July, rising 1.07% compared to last year.
In July, some top-tier integrated cobalt sulfate smelters' operating rates remained stable, while small and medium-sized ones reduced the production significantly due to heavy cost pressure. The orders from downstream precursor companies were moderate in July, but it rarely benefited the raw material side amidst accumulating raw materials inventory. As a result, the small and medium-sized smelters lowered their offers actively in the off-season, and some chose to suspend the production. Nevertheless, a smelter in East China resumed the production in July, thus the production decline was mild.
In August 2024, China's cobalt sulfate production is estimated to be 20,000 tonnes, down 9.73% MoM and 32.01% YoY. The market is projected to enter the traditional peak season starting from late August, but there has not been a significant increase on the demand side. The downstream players therefore stand on the sidelines. The inventory accumulation in July and cost concerns also force some smelters to continue to reduce or suspend the production in August.
Cobalt Chloride
China's cobalt chloride production stood at 22,224 tonnes in July, with a MoM decrease of 6% and a YoY rising of 37.41%, according to Mysteel survey. The production from January to July totaled 138,760 tonnes, rising 75.80% compared with 2023. In July, the downstream players mostly acquired raw materials via long-term orders, and orders received by top-tier smelters remained normal. From the region-wise perspective, the operating rates in Zhejiang Province decreased slightly, while smelters in other regions maintained a normal production pace.
In August 2024, China's cobalt chloride production may reach 20,000 tonnes, a decrease of 10.01% compared to the previous month. The continuous decline in raw material prices anticipated in August make the industry players bearish, and the buyers take the opportunities to force down the spot prices, dampening the production enthusiasm of smelters. In addition, the electronics demand is still sluggish. Therefore, it is expected that cobalt chloride production will slightly decline in August.
Lithium Carbonate
China's lithium carbonate production totaled 65,500 tonnes in July, a decrease of 2.1% MoM. Despite seasonal production increases in Qinghai and the end of maintenance in Sichuan, overall production decreased compared to last month. Jiangxi's major suppliers were operating at high capacity, but maintenance at some small smelters had led to reduced output. And there were slight production decreases at the recycling end and contract smelting plants.
It is expected that China's lithium carbonate production will fall 6.9% MoM at 60,900 tonnes in August. Due to the current price cost inversion, orders for contract manufacturers are likely to decrease, and some production smelters in Jiangxi are expected to reduce production in August.
Lithium Hydroxide
China's lithium hydroxide production stood at 23,600 tonnes in July, down 4.2% MoM, according to Mysteel survey. Despite stable operating rates among producers and sufficient raw material supply, some companies prioritized lithium carbonate production, resulting in a decrease in lithium hydroxide production in July.
It is likely that China's lithium hydroxide production will fall 3.4% MoM at 22,800 tonnes in August. Although leading ternary enterprises maintain stable production and demand from customer-supplied sources remained significant, some producers still adjust their production expectations downward and mainly produce based on sales orders.
Ternary Precursor
China's ternary precursors production totaled 70,300 tonnes in July, a rise of 11.7% MoM and a decrease of 11.34% YoY. Some top-tier battery cell enterprises began to build stocks in advance in July, driving the demand in the month but also overdrawing the demand in August.
Therefore, the production scheduling of ternary cathode materials in August is basically flat compared with that in July.
The production of China's ternary precursors is projected at 71,300 tonnes in August, with an increase of 1.48% MoM and a decrease of 9.64% YoY.
Ternary Cathode Materials
China's ternary cathode materials production reached 56,500 tonnes in July, an increase of 19.04% MoM and 6.47% YoY. In July, China's ternary battery cell enterprises built stocks with the prices staying low, lifting the demand for ternary cathode materials, but overdrawing the demand in August.
In August 2024, China's ternary cathode materials production is expected at 57,900 tonnes, a month-on-month increase of 2.48% and a year-on-year increase of 4.57%.
Cobalt Powder
China's cobalt powder production was 771.5 tonnes in July, a decrease of 7.05% MoM and an increase of 4.12% YoY. The production from January to July accumulated to 5,700.5 tonnes, up 13.83% compared to last year, according to Mysteel survey.
In July, the mainstream cobalt powder factories maintained the production, but there was still a reduction due to weak demand, with some small and medium-sized factories receiving fewer orders. Therefore, the overall cobalt powder production in July showed a palpable decline.
It is estimated cobalt powder production in August will reach 800 tonnes. The top-tier factories are likely to maintain the production largely unchanged from July, and some small factories will see limited new orders.
Electrolytic Cobalt
China's electrolytic cobalt production went up 13.27% MoM to 4,480 tonnes in July, a YoY rise of 85.82%, according to Mysteel survey. In July, most electrolytic cobalt plants maintained normal production, with high operating rates. Although some plants stopped the production for maintenance, the impact on the overall production was insignificant due to its relatively small capacity.
It is likely that China's electrolytic cobalt production will go up 0.45% MoM or 107.85% YoY at 4,500 tonnes in August. The electrolytic cobalt market is likely to extend the weakness in August. With the downstream demand unlikely to improve significantly, the plants mostly maintain normal shipments. However, there may be a slight increase in the total production as some electrolytic cobalt plants will resume the production.
Co3O4
China's Co3O4 production reported 8,930 tonnes in July, rising 0.34% MoM and 13.83% YoY. The production of Co3O4 in the first seven months totaled 55,720 tonnes, a year-on-year increase of 41.73%. In July, the production of top-tier enterprises was stable thanks to a stable client poor, especially the electronics orders. Meanwhile, China's Co3O4 enterprises were producing normally, and the downstream market demand was stable as well.
The production of China's Co3O4 is expected to reach 8,930 tonnes in August 2024, which is stable on month and rises 13.45% on year. In August, domestic Co3O4 enterprises may maintain normal production and the orders are mostly from old customers.
LCO
China's LCO production went up 8.94% MoM at 9,260 tonnes in July. The demand from downstream electronics sector was flat in July. And the shipments of small and medium-sized enterprises did not bring surprises either. Meanwhile, the market players mostly focused on the delivery of long-term orders.
In August 2024, China's LCO production is estimated at 9,260 tonnes, flat MoM. The market players are mostly bearish due to the prices of raw material Co3O4 staying on the downtrend. Although some companies have received some new orders, the overall demand is unlikely to pick up substantially.
LFP
China's LFP production stood at 198,000 tonnes in July, up 1% MoM. Affected by the off-season, battery cell factories maintained a strategy of inventory reduction. LFP smelters experienced fluctuating orders, but overall demand remained relatively stable.
It is likely that China's LFP production will rise 4.9% MoM at 207,800 tonnes in August due to the support from energy storage orders, which will lead to a recovery in downstream demand and increased procurement of LFP.
Anode
The anode material production of mainstream producers stood at 114,400 tonnes in July, rising 1.54% MoM. The anode market was stable as top-tier producers maintained steady production levels and many were fulfilling previous contracts. Due to the reduction in petroleum coke prices in the raw material market, the cost pressures for mid- to low-anode producers eased somewhat. Nevertheless, some producers still operated with reduced profit margins because of low prices in the market. It is likely that China's anode material production will fall 3.27% MoM at 110,600 tonnes in August.
Separator
China's lithium-ion battery separator production stood at 1.595 billion sq.m. in July, a monthly decrease of 1.24%. The production consisted of around 380 million sq.m. dry process separator (PP) and 1.215 billion sq.m. wet process separator (PE). It is expected that China's separator production will rise 0.3% MoM at 1.6 billion sq.m. in August.
