Nickel Sulfate
China's nickel sulfate production stood at 173,400 tonnes in November, or 38,100 tonnes in Ni. content, down 4.45% month on month (MoM) according to Mysteel survey. The production comprised 0% nickel briquette/powder, 59.4% MHP, 31.71% high-grade nickel matte, and 8.89% secondary nickel by raw material.
In November, weak demand from ternary precursor manufacturers and ongoing losses prompted nickel sulfate producers to cut output. Due to cost pressures, high-grade nickel matte refining lines saw significant reductions. However, the decline was slightly offset by increased demand for pure nickel.
It is expected that China's nickel sulfate production will decline 4.45% MoM at 36,400 tonnes in December, and around 13,000 tonnes of nickel sulfate will be used to produce nickel plates. Nickel sulfate production is expected to decline slightly due to weakening ternary precursor output and rising demand for pure nickel.
Cobalt Sulfate
China's cobalt sulfate production stood at 18,808 tonnes in November, with a decline of 3.91% MoM and 28.98% YoY. The production from January to November totaled 246,976 tonnes, with a drop of 9.37% YoY. In November, the demand for sulfate cobalt was sluggish and end-side users were slowing in building stocks. Therefore, the cobalt sulfate enterprises had to reduce or suspend the production for persistent losses. Nevertheless, the top-tier enterprises still maintained a relatively high operating rate. Overall, the production of cobalt sulfate only slightly declined in November.
In December, China's cobalt sulfate production is estimated at 18,100 tonnes, down 3.76% MoM and 34.92% YoY. In December, the weak downstream demand may continue and even aggravate. Although mainstream precursor manufacturers will build up stocks according to their production scheduling, the demand for spots is likely to be subsided, and the negotiations of long-term orders are not smooth either. As a result, most cobalt salt smelters will have to strategically curtail the production in response to market changes. In addition, the reduction in the end-product supply has a chain reaction on the recycling market, leading to a decrease in the amount of available recyclable materials. In summary, it is expected that the production of cobalt sulfate will further decrease in December.
Cobalt Chloride
China's cobalt chloride production reached 20,300 tonnes in November, with a month-on-month increase of 0.58% and a year-on-year jump of 75.19%. Meanwhile, the first eleven months reported a combined production of 225,770 tonnes, rising 64.51% compared to last year. In November, the cobalt chloride market competition was still fierce on moderate profits. But thanks to the demand recovery from the Co3O4 market, the cobalt chloride production was resilient in November.
In December, China's cobalt chloride is likely to be down 1.48% MoM at 20,000 tonnes. As the end of the year approaches, the demand for digital products is gradually slowing down, which in turn has weighed down the demand for cobalt chloride. At the same time, cobalt sulfate will serve as an alternative to cobalt chloride in some scenarios. Taken together, there will be a certain reduction in cobalt chloride production in December.
Lithium Carbonate
China's lithium carbonate production totaled 66,750 tonnes in November (Mysteel newly added four lithium smelters to the sample library, with a combined capacity of 109,000 tonnes/year), rising 13.2% month on month, per Mysteel survey. The old survey sample reported a combined production of 62,800 tonnes, up 6.4% MoM.
The increase was primarily driven by strong demand, which heightened production enthusiasm among smelters in Jiangxi. Production in Qinghai and Sichuan remained stable, and some manufacturers activated flexible production lines. Additionally, with the support of subcontracting orders from factories in northern China, the overall operating rate is relatively high.
It is expected that China's lithium carbonate production will rise 4.7% MoM at 69,900 tonnes in December. Towards the end of the year, while some producers in Jiangxi and Qinghai have begun upgrading production lines, temporarily reducing production, the addition of new capacity is expected to sustain an upward production trend.
Lithium Hydroxide
China's lithium hydroxide production stood at 20,700 tonnes in November, down 3.3% MoM. The weak demand from the ternary battery sector led smelters to adopt an order-based production strategy. Additionally, some manufacturers shifted flexible production lines to produce lithium carbonate, further reducing lithium hydroxide output.
It is expected that China's lithium hydroxide production will fall 5.1% MoM at 19,700 tonnes in December, as smelters are likely to maintain low operating rates and orders may decrease.
Ternary Precursor
China's ternary precursors production dropped 0.22% MoM and rose 14% YoY to 67,600 tonnes in November. In November, the production was relatively stable thanks to the CATL supply chain and demand from the overseas, in addition to some players rushing to meet their annual production guidance by year-end.
China's ternary precursors production is estimated at 63,600 tonnes in December, down 5.92% MoM due to the traditional off-season, which was up 10.13% compared with last year.
Ternary Cathode Material
China's ternary cathode material production went down 3.39% MoM to 55,000 tonnes in November, with an increase of 19.04% YoY. Apart from the stable CATL supply chain, other ternary battery cell producers started to scale down the production as early as in October. But the reduction was slow as some players rushed to meet their annual guidance in the fourth quarter.
China's ternary cathode materials production is expected to be 54,200 tonnes in December, a month-on-month decrease of 1.45% and a year-on-year increase of 23.31%. Although the battery cell factories' production scheduling is at a relatively high level, most of them are concerned about potential order defaults in the future and are cautious in raw material procurement.
Cobalt Powder
China's cobalt powder production moved down 1.36% MoM to 763 tonnes in November, up 2.69% compared to last year. The total production over January-November reached 8,741 tonnes, with a YoY rising of 11.38%. In November, the end-market demand was flat. However, most companies reported a sound order book including some new orders, ensuring higher operating rates. As a result, the top-tier producers were able to maintain high operating rates by year-end.
It is estimated cobalt powder production in December will be stable at 773 tonnes. In December, the cobalt powder will be firmly supported by resilient raw material prices. However, as the end of the year approaches, the downstream demand will become slow, and only the top-tier producers that are able to maintain normal shipment.
Electrolytic Cobalt
China's electrolytic cobalt production went up 5.08% MoM to 5,360 tonnes in November, with an annual increase of 108.56%. The production from January to November totaled 42,189 tonnes, with an increase of 117.19% compared to the previous year. In November, the demand for high-temperature alloys and magnetic materials was weak, hence the downstream players were unwillingness to stock up. However, most smelters maintained high operating rates in order to ensure smooth shipment by year-end.
It is estimated that China's electrolytic cobalt production will be between 5,300-5,400 tonnes in December as the producers are expected to keep the operating rates at a high level for the potential routine stockpiling ahead of the end of the year. Therefore, it is expected that the electrolytic cobalt production will increase slightly in December.
Co3O4
China's Co3O4 production read 9,122 tonnes in November, with an increase of 5.33% MoM and 35.95% YoY. The production over January-November added up to 91,842 tonnes, a year-on-year increase of 33.85%. In November, the production of top-tier Co3O4 enterprises moved up slightly while the small-sized ones reported a mild production cut. As the demand on the electronics market began to decline, most smelters mulled over slowing the production. However, considering the current fierce market competition and the possibility of new growth in LCO market, the top-tier smelters decided to expand the production to seize the market share, resulting in an increase in cobalt production in November.
The production of China's Co3O4 is expected to reach 8,500 tonnes in December, down 6.82% on month and up 69.48% on year. In December, the demand for LCO will become increasingly weak. Coupled with an oversupply of Co3O4 in November, the Co3O4 enterprises will reduce the production accordingly.
LMO
China's lithium manganese oxide (LMO) production stood at 9,090 tonnes in November, up 0.66% MoM.
LCO
China's lithium cobalt oxide (LCO) production reached 9,350 tonnes in November, a month-on-month drop of 3.21% and a year-on-year increase of 12.65%. In November, the demand in the electronics industry gradually weakened, and the producers reduced the production in response. Thus the production of LCO showed a slight downward trend in November.
It is likely that there will a further decline in LCO production in December, and market players mostly hold a bearish sentiment. It is expected that LCO production may dip 3.4% MoM in December, considering that the demand for LCO will not plummet sharply.
LFP
The production of lithium iron phosphate (LFP) in China reached 276,800 tonnes in November, a month-on-month increase of 10.0%. The demand for power batteries remained strong despite the seasonal off-peak period, driven by subsidy policies. Meanwhile, China's energy storage sector saw significant growth due to the year-end grid connection deadline in late December, as well as a surge in overseas projects, leading to a notable increase in shipments.
It is expected that China's LFP production will rise 0.9% to 279,400 tonnes in December. Supported by subsidies, demand in the new energy vehicle market remains robust, with some purchases brought forward, while overseas energy storage orders will likely to stay strong in the short term.
Anode
China's anode material production reported 159,400 tonnes in November, down 9.07% MoM and up 28.86% YoY. In November, the top-tier manufacturers maintained high operating rates, while the medium and small-sized ones were the other way round. It is expected that China's anode material production will rise 0.38% MoM at 160,000 tonnes in December with players building stocks approaching the year-end.
LiPF6
China's LiPF6 production increased by 7.59% MoM to 15,600 tonnes in November. The demand for LiPF6 remained balanced, and the utilization rate of production capacity increased.
It is expected that China's LiPF6 production will rise 0.64% to 15,700 tonnes in December, as downstream demand is anticipated to rise slightly and battery manufacturers are expected to increase production scheduling.
Electrolyte
China's electrolyte production of mainstream producers totaled 115,500 tonnes in September, up 7.44% MoM.
It is expected that China's electrolyte production will rise to 118,600 tonnes in December. Due to strong downstream demand during the off-season and the expectation of battery manufacturers stocking up in advance, the demand for electrolyte is projected to continue rising, leading to an increase in the capacity utilization rate.
