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Nickel Sulfate
China's nickel sulfate production stood at 137,600 tonnes in June, or 40,100 tonnes in Ni. content, up 1.52% MoM, according to Mysteel survey. The production comprised 0% nickel briquette/powder, 59.78% MHP, 30.94% high-grade nickel matte, and 7.28% secondary nickel by raw material.
In June, the ternary precursor production held steady, but the demand for nickel sulfate from nickel plate sector declined, thus the overall demand for nickel sulfate dropped. On the supply side, the new capacity ramp-up in Hubei expanded nickel sulfate production. However, the demand for spot nickel sulfate was weak due to the process of market integration, and the prices of nickel sulfate remained sluggish.
China's nickel sulfate production is projected at 38,900 tonnes in Ni. Content in July, down 1.49% month-on-month. Of this, approximately 15,700 tonnes of nickel sulfate will be used to produce nickel plates. With no significant demand growth and persistent low profit margins due to firm raw material costs, the spot nickel sulfate producers are expected to cut the production. However, rising nickel prices have improved profitability in nickel plate production using nickel sulfate, potentially prompting integrated producers to slightly increase the production scheduling.
MHP
Indonesia's MHP production reached 38,500 tonnes in Ni. content in June, down 2.14% MoM but up 42.98% YoY, according to Mysteel's survey of eight sample projects in Indonesia.
From January to June, the cumulative production of MHP in Indonesia reached 222,300 tonnes in Ni. content, an increase of 61.43% year-on-year. It is expected that Indonesia's MHP production will up 3.98% MoM to 40,000 tonnes in Ni. content in July.
Nickel Matte
Indonesia's nickel matte production reached 24,600 tonnes in Ni. content (the same below unless otherwise stated) in June, up 51.68% MoM, according to Mysteel's survey of 14 sample projects in Indonesia. This includes 17,900 tonnes of high-grade nickel matte and 6,700 tonnes of low-grade nickel matte.
From January to June, Indonesia's cumulative nickel matte production totaled 136,000 tonnes, down 16.33% compared to the previous year. In July, Indonesia's nickel matte production is projected at 26,600 tonnes, up 8.00% MoM but down 22.31% YoY.
Cobalt Sulfate
In June, China's cobalt sulfate production stood at 15,065 tonnes, showing a month-on-month decrease of 14.7% and a year-on-year decline of 33.81%. In June, the ternary precursors producers still focused on destocking, while the profitability of electrolytic cobalt did not improve, leading to inventory accumulation. When the downstream demand did not recover, the production rhythm of cobalt sulfate slowed down, coupled with tight raw material supply.
It's likely that China's cobalt sulfate production in July may reach 14,471 tonnes, moving down 3.94% MoM and 34.68% YoY. The production reduction is mainly due to the unclear signs of recovery in demand for ternary materials, coupled with electrolytic cobalt smelters' high inventories. Thus, the downstream demand for cobalt sulfate will be constrained. Secondly, the supply of raw materials is increasingly tight, and smelters generally adopt a low operating rate strategy to maintain operation. In this condition, it is expected that the production of cobalt sulfate in July will show a further month-on-month decline.
Cobalt Chloride
China's cobalt chloride production in June totaled 18,843 tonnes, an increase of 0.17% MoM and a decrease of 20.3% YoY. In June, the market stayed sluggish, and the manufacturers maintained the production unchanged. The demand from the Co3O4 sector was stable.
It's estimated that China's cobalt chloride production may reach 18,543 tonnes in July, a decrease of 1.59% MoM and 19.19% YoY. In July, it is expected that the Co3O4 demand will weaken, and the production of electrolytic cobalt will continue to decrease due to the hard-to-repair profits, resulting in an overall decrease in market demand for cobalt chloride. Meanwhile, some cobalt salt smelters have experienced production cuts due to the tight supply of raw materials and sustained high prices, resulting in a potential decline in cobalt chloride production in July.
Lithium Carbonate
According to Mysteel, China's lithium carbonate production reached 74,000 tonnes in June, a 5.7% increase month-on-month (MoM). Most lithium producers maintained stable operations during the month, with restarted capacity continuing to raise the production. Production in Qinghai held steady, while Jiangxi saw slightly improved capacity utilization rates. Furthermore, stabilizing lithium ore prices partially eased production pressure on lithium producers that rely on outsourced feedstock, encouraging some to resume operations by month-end. However, constrained by reduced orders, the recycling sector players primarily sustained operation through carburization processing, leaving little room for higher operating rates.
China's lithium carbonate production is forecast to rise 7.1% MoM at 79,300 tonnes in July. Integrated producers in Jiangxi continued ramping up production while maintaining high operating rates. Production lines in Sichuan that underwent maintenance have resumed the operations early in the month. The production in Qinghai is expected to remain stable. Within the recycling sector, some manufacturers have reported higher orders and increased production activity. Although planned maintenance on spodumene lines continues, the overall July production is expected to increase significantly.
Lithium Hydroxide
China's lithium hydroxide production stood at 20,200 tonnes in June, down 5.8% from the previous month, based on Mysteel's survey. Market demand remained weak in June with insufficient orders for ternary batteries. Facing inventory pressure and depressed processing margins, some hydroxide producers cut the production, leading to a month-on-month decline in lithium hydroxide production.
In July, China's lithium hydroxide production is expected to decrease 1.5% month-on-month to 19,900 tonnes. Although the weak demand trend persists, the decline in production has slowed down in early July as manufacturers seek to maintain basic operations after the maintenance and inventory reduction in June.
Ternary Precursor
China's ternary precursors production stood at 64,800 tonnes in June, representing a month-on-month increase of 3.02% and a year-on-year rising of 7.45%. In June, there was a significant increase in demand due to outstanding sales of Xiaomi Auto, resulting in an overall increase in ternary precursor production. However, demand for other products decreased due to the traditional off-season.
Looking ahead to July, China's ternary precursors production is estimated at 63,200 tonnes, showing a 2.47% MoM reduction and a 10.05% YoY decrease respectively.
Ternary Cathode Material
China's ternary cathode material production in June reached 61,200 tonnes, up 0.25% MoM and 29.06% YoY, according to Mysteel's survey.
The stable production was mainly driven by strong orders for mid-nickel high-voltage products, supported by robust demand from Xiaomi Auto. However, the demand for other series declined due to the traditional off-season.
China's ternary cathode material production in July is likely to be 60,600 tonnes, down 1.06% MoM but still up 7.26% YoY.
Cobalt Powder
China's cobalt powder production stood at 777 tonnes in June, down 0.26% MoM and 6.39% YoY. In June, the cobalt powder prices were slightly boosted by the electrolytic cobalt market. However, orders from the downstream traditional hard-alloy industry remained flat, and the manufacturers maintained high operating rates, with only slight fluctuations in overall production.
The cobalt powder production is estimated at 770 tonnes in July. In early July, the firm prices of cobalt powder may have limited transmission to the upstream and downstream prices. Coupled with the fact that July is in the off-season, there will see fewer new orders signed, and market players mainly hold a cautious attitude and focus on destocking. It is expected that cobalt powder production will remain stable with a slight decrease in July, with producers focusing on delivering early orders.
Electrolytic Cobalt
In June, China's electrolytic cobalt production was 2,600 tonnes, a month-on-month decrease of 16.93% and a year-on-year drop of 34.26%. In late June, the Democratic Republic of Congo (DRC) extended the cobalt export ban, resulting in a further shortage of producers' raw material, with significant production shutdowns and curtailments. Nevertheless, some producers put new lines into operation, while they mostly delivered long-term orders, with limited resources for spot transactions. In addition, the overall operating rates were low due to the meager profit margin.
China's electrolytic cobalt production is expected to reach 3,000 tonnes in July. At present, with high domestic inventory and firm costs, the profit margin of electrolytic cobalt is narrow, and the spot transactions are muted. But the new production lines will contribute additional production.
Co3O4
In June, China's Co3O4 production recorded 10,100 tonnes, a growth of 6.77% MoM and 10.99% YoY. On the one hand, the long-term orders signed between Co3O4 smelters and downstream LCO manufacturers prompted most producers to maintain stable production to ensure the order delivery. On the other hand, the deep binding between a leading enterprise and downstream customers has enabled it to maintain full production capacity. In addition, the other top-tier producers that focus on the spot market also ramped up the production, resulting in an overall increase in Co3O4 production in June.
It's likely that China's Co3O4 production in July may drop 13.66% to 8,720 tonnes, with a decline of 4.49% YoY. In July, the supply of domestic cobalt intermediates is expected to remain tight. The cobalt salts producers have generally lowered their operating rates due to considerations of medium-long-term production stability, while Co3O4 producers mainly maintain stable supply. It is expected that the Co3O4 production in July will decrease.
LMO
In June, China's lithium manganese oxide (LMO) production reached 8,550 tonnes, down 1.36% month-on-month. Leading LMO producers maintained stable production in June, primarily fulfilling existing orders. The small and mid-scale enterprises faced shipment constraints amid weakening downstream demand, thus modestly reducing the operating rates. Consequently, the overall supply declined month-on-month.
LCO
China's LCO (lithium cobalt oxide) production totaled 10,700 tonnes in June, moving down 5.64% compared to last month. In June, it was difficult to sign new LCO orders since downstream battery cell factories stocked up ahead of schedule already that was enough to cover the production until July due to the DRC's cobalt export ban. In this case, most market players mainly focused on delivering old orders. Specially, the top-tier smelters maintained stable production while the small and medium-sized ones slightly reduced the production, resulting in a slight decrease in production.
It's likely that China's LCO production in July may be 10,800 tonnes, with a month-on-month increase of 0.93% as August-September is the peak season for 3C electronic products and the demand will climb up. Considering the tight supply of raw materials, battery cell factories may may build up stocks in advance. However, most downstream users' raw material stocks can meet the needs in July, so it is expected that there will be little change in LCO production.
Iron Phosphate
China's iron phosphate production reported 232,600 tonnes in June, down 0.39% or 900 tonnes MoM, Mysteel's survey showed. The raw material cost remained stable in the month, while the market prices edged down on rising supply driven by the commissioning of new projects. But the increase was offset by several producers taking overhaul in June, which focused on destocking. The integrated producers, on the other hand, maintained high operating rates.
It is likely that China's iron phosphate production will rise 6% MoM at 246,500 tonnes in July after the producers overhauled in Juny come back online. But the prices are likely to be constrained by the production supply rally.
LFP
China's LFP production was up 0.21% MoM at 288,500 tonnes in June. Although power battery demand softened due to cell companies prioritizing destocking in June, the energy storage segment outperformed. Battery cell manufacturers' rush to secure export orders drove a marginal increase in overall demand.
China's LFP production for July is projected at 294,500 tonnes, up 2.08% MoM. New orders for Xiaomi's electric vehicles bolster power battery demand in July. Coupled with strong energy storage demand, overall market consumption is projected to rise month-on-month, defying typical seasonal slowdowns. LFP cathode producers have maintained stable order volumes with high operating rates, and smaller-scale plants sustained steady production.
Anode
China's anode material production reached 185,600 tonnes in June, rising 8.13% month-on-month but down 8.7% year-on-year. Anode material producers prioritized fulfilling existing orders and reducing inventories, yet moderated their production pace due to cautious outlooks on future demand.
