Nickel Sulfate
China's nickel sulfate production stood at 186,300 tonnes in August, or 41,000 tonnes in Ni. content, up 4.66% month on month (MoM) according to Mysteel survey. The production comprised 0% nickel briquette/powder, 61.08% MHP, 29.8% high-grade nickel matte, and 9.11% secondary nickel by raw material.
The monthly growth in August was due to the increase in demand and the mild recovery of profits for nickel sulfate companies, which boosted their production enthusiasm. At present, the rise in nickel sulfate production mainly came from the integrated enterprises.
It is expected that China's nickel sulfate production will rise 1.13% MoM at 41,400 tonnes in September, and around 12,000 tonnes of nickel sulfate will be used to produce nickel plates. Additionally, the demand for nickel sulfate is expected to slow down in the fourth quarter as the peak season comes to an end in the ternary battery field. Macroeconomic factors driving down nickel prices are likely to reduce the industry's enthusiasm for nickel sulfate, and the policies regarding nickel ore in Indonesia also have a noticeable impact on nickel intermediate products cost.
Cobalt Sulfate
In August, China's cobalt sulfate production totaled 19,793 tonnes, with a monthly decline of 10.66% and an annual drop of 32.71%, Mysteel survey showed. From January to August, the production accumulated at 189,286 tonnes, dropping 3.977% compared to last year.
In August, the downstream demand remained weak, and only the top-tier smelters secured large orders from the power battery field. The medium and large-sized precursor enterprises maintained normal production based on the previous inventory. The upstream raw material prices rebounded slightly, while the intermediate product smelters refused to lower the prices due to cost factors. Hence the buyers and sellers were in a tug-of-war. Meanwhile, a cobalt sulfate enterprise in Guangdong Province continued to suspend the production to control the spot supply. Therefore, the overall production in August continued to decline.
In September, China's cobalt sulfate production is estimated to be 20,780 tonnes, rising 4.99% MoM but decreasing 23.59% YoY. In September, the downstream demand has not yet shown great improvement. Apart from the mainstream precursor production enterprises stockpiling routinely, the demand for spots has been lackluster. The small and medium-sized enterprises actively reduce spot supply to stabilize the prices. With the downstream enterprises maintaining low operating rates, the nickel sulfate production growth is estimated to be mild.
Manganese Sulfate
China's battery grade manganese sulfate production stood at 14,500 tonnes in August, down 3.3% Mom and 27.13% YoY, according to Mysteel survey. The demand in August was flat as the low prices in July promoted the downstream players to build stocks in advance, overdrawing the demand in August. Though the precursor sector was in the traditional seasonal high.
It is expected that the battery grade manganese sulfate production keep falling in September with some producers having plans to reduce the production.
Cobalt Chloride
In August 2024, China's cobalt chloride production stood at 23,772 tonnes, with a MoM increase of 6.97% and a YoY rising of 55.03% according to Mysteel survey. The demand from the electronics market remained relatively stable, and the inquiries for cobalt chloride were moderate. Although it is difficult to find low-priced raw materials, some smelters still maintained high operating rates. Therefore, the overall production of cobalt chloride increased in August.
In September 2024, China's cobalt chloride is likely to rise to 23,978 tonnes, an increase of 0.87% compared to the previous month. With the downstream demand staying moderate, the overall capacity utilization rates of downstream Co3O4 and LCO are likely to maintain momentum, generating constant demand for cobalt chloride, in addition to their relatively low cobalt chloride inventory.
Lithium Carbonate
China's lithium carbonate production totaled 62,400 tonnes in August, a decrease of 4.8% MoM. In August, some producers in Jiangxi slightly reduced the production due to losses or equipment maintenance. Meanwhile, operations in Sichuan and Qinghai remained relatively stable, but the output in the recycling sector decreased due to meagre profits amidst persistently soft lithium carbonate prices.
It is expected that China's lithium carbonate production will rise 1.0% MoM at 63,000 tonnes in September. This increase is attributed to the anticipated rise in downstream demand during the peak season in September, which may encourage smelters to ramp up production. However, with maintenance of production lines at smelters in Jiangxi still ongoing, the overall output in September is projected to experience only a modest increase.
According to Mysteel's research, among the 27 lithium carbonate production companies surveyed in Jiangxi and Sichuan Province, 9 have suspended operations or are under maintenance. Specifically, 5 smelters have either ceased the production or are undergoing maintenance, while 3 have reduced output by a total of 1,600 tonnes. One of these companies are producing in full capacity as it plans to undertake production line upgrades by the end of September, thereby increasing the production by 500 tonnes.
For those able to maintain normal production, they either have the profits locked in advance via hedging tools, or secure long-term orders. In addition, several producers, which fail to find low-priced raw materials, choose to re-process the old lithium carbonate sourced from the market and deliver it to the futures market.
Lithium Hydroxide
China's lithium hydroxide production stood at 22,600 tonnes in August, down 3.4% MoM, per Mysteel survey. The reduction was primarily due to some producers scaling down production guidance, combined with upgrades to flexible production lines in certain smelters in August. Additionally, there was limited demand for spots, and long-term contracts still accounted for a significant portion of the market.
China's lithium hydroxide production will likely fall 4.8% MoM at 21,700 tonnes in September. While the launch of new production lines by some producers is expected to lift the total production, some of these lines will be allocated to produce lithium carbonate. Additionally, given the current operating rates of lithium hydroxide smelters, which may not reach full capacity, China's lithium hydroxide production is likely to fall further in September.
Ternary Precursor
In August 2024, China's ternary precursors production totaled 71,700 tonnes, up 2.05% MoM but down 9.13% YoY, Mysteel survey showed. The demand for ternary precursors improved slightly along with rising demand for ternary cathode materials. However, some market players began to build stocks in July in advance when the prices were low, overdrawing the demand in the following months.
The production of China's ternary precursors is estimated at 69,200 tonnes in September, down 3.49% MoM and 4.63% YoY.
Ternary Cathode Material
In August 2024, China's ternary cathode materials production reached 58,300 tonnes, an increase of 3.21% MoM and 5.31% YoY. In August, the domestic production of ternary cathode materials slightly increased due to the rising battery cell factories' demand. However, battery cell factories already stockpiled in advance in July when the prices were relatively low prices.
In September, China's ternary cathode materials production is expected to be 57,700 tonnes, a month-on-month decrease of 1.05% and a year-on-year increase of 6.92%.
Cobalt Powder
In August 2024, China's cobalt powder production was 760 tonnes, a decrease of 1.49% MoM and a year-on-year increase of 8.57%. The production from January to August accumulated to 6,460.5 tonnes, up 13.18% compared to last year according to Mysteel survey.
The downstream demand for cobalt powder in August continued to be weak. Moreover, the mainstream enterprises were with heavy inventory pressure and some manufacturers reduced the production, resulting in a slight overall decline in cobalt powder production in August.
It is estimated cobalt powder production in September will reach 750 tonnes, a decrease of 1.32% compared to the previous month. At present, some small factories are challenged by the poor demand, except for the large factories which maintain normal production. It is expected that the production of cobalt powder in September will not change significantly compared to that in August.
Electrolytic Cobalt
In August 2024, China's electrolytic cobalt production jumped 4.11% MoM to 4,664 tonnes, up 115.43% YoY, according to Mysteel survey. The total electrolytic cobalt production from January to August reached 27,058 tonnes, with an annual increase of 125.30%.
In August, electrolytic cobalt manufacturers maintained high operating rates, and some even reached full capacity. But the domestic market was obviously oversupplied, and the market transactions were sluggish, except for deliveries for long-term orders and on-demand purchases.
It is estimated that China's electrolytic cobalt production will go up 1.84% MoM or 103.43% YoY at 4,750 tonnes in September. The domestic market players are not in a rush to building stocks as the seasonal high in September is likely to be modest. The end of the summer break overseas has little impact on the domestic market. Hence it is expected that electrolytic cobalt production will remain flat in September.
Co3O4
In August 2024, China's Co3O4 production totaled 9,570 tonnes, rising 7.17% MoM and 48.14% YoY. The production of Co3O4 in the first eight months was 65,290 tonnes, a year-on-year increase of 42.63%. In August, the demand from top-tier enterprises was still stable, and the orders from the electronics sector were mostly between top-tier players. Generally, China's Co3O4 enterprises were producing normally, with the stable downstream demand.
The production of China's Co3O4 is expected to reach 9,000 tonnes in September, up 14.5% on month and down 5.96% on year.
LCO
In August, China's LCO production climbed to 9,350 tonnes, with a MoM and YoY increase of 6.25% and 46.44% respectively, according to Mysteel survey. In August, the demand from downstream electronics sector remained stable, with limited new orders. Therefore, the small and medium-sized enterprises' shipments were weak, and the existing delivery was mainly with long-term orders.
Affected by the soft prices of Co3O4 in September, the LCO manufactures may still hold the bearish attitude. And the overall demand is unlikely to boom. It is expected that LCO production in September will remain unchanged compared to the previous month.
LFP
The production of lithium iron phosphate (LFP) in China reached 214,800 tonnes in August 2024, marking a month-on-month increase of 8.5%. The growth is attributed to a recovery in demand and increased procurement of LFP in August, and some manufacturers started stocking up in advance to prepare for the peak season.
It is expected that China's LFP production will rise 9.2% to 234,600 tonnes in September as it will enter the traditional peak season. Both the power and energy storage sectors are expected to grow, and some small and medium-scale LFP manufacturers will operate at full capacity.
Anode
The anode material production of mainstream producers declined 3.30% MoM to 110,600 tonnes in August. This decline was due to the overall reduction in operating capacity, as well as a month-on-month drop in the production and sales of electric vehicles. Additionally, the top-tier producers were primarily focused on fulfilling previous contracts.
Looking ahead, the raw material prices have been low recently, easing cost pressure to some extent. Nevertheless, with demand under pressure and soft market prices, the improvement in actual company profits has been limited. According to Mysteel, China's anode material production will likely fall 4.42% MoM at 105,700 tonnes in September.
LiPF6
China's LiPF6 production reported 12,900 tonnes in August, up 6.61% MoM thanks to the battery cell factories ramping up the production for the upcoming traditional seasonal high.
The demand is projected to rise further in September with the end-market kicking off the peak season, and the LiPF6 production is estimated at 13,100 tonnes in September, up 1.55% MoM, Mysteel survey showed.
Electrolyte
China's electrolyte production of mainstream producers was 99,500 tonnes in August, up 2.05% MoM amidst rising production scheduling of battery cell factories.
The production is likely to maintain momentum in September with the monthly production estimated at 102,000 tonnes, rising 3.31% from August.
Separator
China's lithium-ion battery separator production stood at 1.647 billion sq.m. in August, a month-on-month increase of 1.83%. The production consisted of around 385 million sq.m. dry process separator (PP) and 1.262 billion sq.m. wet process separator (PE). It is expected that China's separator production will rise 0.79% MoM at 1.66 billion sq.m. in September.
