Source: Mysteel
Nickel
China's refined nickel production stood at 24,170 tonnes in September, rising 6.59% from August and 56.36% from last year, per Mysteel survey of 13 sample smelters (up by one from August).
The production totaled 175,591 t over January-September, an increase of 35.2% year on year (YoY).
The operating rates of domestic refined nickel smelters averaged 92.64% in September, based on an installed capacity of 27,167 t and an operating capacity of 25,167 t.
The production increase was contributed by several smelters resuming the production. Specially, a smelter in Gansu Province finished maintenance and resumed normal production, and another smelter in Xinjiang also returned to normal. A new smelter came on stream in Anhui, with one more in Hubei actively ramping up the production.
Looking forward over October, the refined nickel smelters are expected to maintain high operating rates. However, electrowinning nickel profits have been shrinking on rapidly falling nickel prices.
As such, it is expected that domestic refined nickel production will jump 2.19% MoM and 58.09% YoY at 24,700 t in October.
Nickel sulfate
China's nickel sulfate production reported 162,000 tonnes or 35,600 tonnes in metal content in September, down 0.83% MoM but up 0.79% YoY. From the perspective of raw material, the production consisted of 0% nickel briquette and powder, 55.78% intermediates, 32.66% high-grade nickel matte, and 11.47% secondary nickel.
The production is estimated to fall 3.01% MoM but rise 6.37% YoY at 36,600 tonnes in metal content in October.
Domestic nickel sulfate profits were poor in September, and precursor demand also weakened significantly. Hence the smelters started to reduce the production. Since the market dynamics are expected to remain unchanged in October, the monthly production will decline again.
Cobalt sulfate
In September 2023, China's cobalt sulfate production was 27,200 tonnes, a decrease of 7.54% month on month and a year-on-year increase of 3.31%. The cumulative production from January to September was 224,300 tonnes, rising 20.38% from 2022.
The electronics sector remained weak in September, hence the manufacturers were not active in stockpiling raw materials ahead of China's National Day holiday. Although smelters were firm on the prices in light of strong cost support, downstream battery factories had no stockpiling plans. At the same time, with the holding of the Asian Games, some smelters in East China were ordered to reduce the production.
In October, China's cobalt sulfate production is expected to be 29,000 tonnes, an increase of 6.63% MoM and 18.16% YoY. With the arrivals of raw materials around the end of September, the cost support has weakened. More importantly, it is still uncertain whether the demand for power batteries can improve.
Nevertheless, the continuous consumption of inventory in the early stage may trigger downstream restocking, and the rebound in electronics demand may drive a warm-up in market sentiment. It is expected that cobalt sulfate production will slightly rebound in October.
Cobalt chloride
China's cobalt chloride production was 14,000 tonnes in September, down 8.9% MoM. The production totaled 108,200 t over January-September.
The production cut was attributed to smelters reducing the production for Asian Games held in East China. The gradually rebounding electronics sector made the smelters confident as a whole.
The production is estimated at 15,000 t in October, rising 7.38% MoM. First, the cost will drop with the arrivals of raw materials. The momentum in the electronics sector will substantially stimulate the production. In addition, smelters that were affected by the Asian Games will also resume the production.
Co3O4
In September 2023, China's Co3O4 production was 7,860 tonnes, an increase of 21.67% month on month and 39.12% year on year. The cumulative production from January to September was 53,635 tonnes, rising 7.11% from 2022.
In September, with the release of new mobile phone models, the orders from lithium cobalt oxide enterprises increased obviously, encouraging the Co3O4 enterprises to ramp up the production. The rising orders were mainly seen among leading enterprises, resulting in a slight increase in production of Co3O4 in September.
In October, the production of Co3O4 is estimated at 7,900 tonnes. With the continuous unleash of electronics demand in October, the orders from leading LCO enterprises will grow even more significantly. Meanwhile, top-tier Co3O4 enterprises have sped up their raw material stocking, many of which are in full production. But the prices may not rise to the expectation of smelters. It is expected that the production of Co3O4 will steadily increase in October.
Electrolytic cobalt
In September 2023, China's electrolytic cobalt production was 2,335 tonnes, an increase of 7.85% month on month and 135.86% year on year. The cumulative production from January to September was 14,345 tonnes, rising 134.78% on year.
The summer break in the European market ended in September, and the overseas demand improved slightly. However, China's electricity cobalt market remained weak, and the downstream players rarely stockpiled before the National Day Holiday.
Meanwhile, the market transaction volume was insignificant, hence the consumption of electricity cobalt was relatively slow. However, some smelters in East China have lifted the production and reached full capacity, resulting in an increase in total cobalt production in September.
In October, China's electrolytic cobalt production is expected to reach 2,400 tonnes, with a monthly increase of 2.78% and an annual increase of 171.19%. The demand may improve in October, and the smelters are expected to maintain normal production to meet downstream players' rigid demand.
Cobalt powder
China's cobalt powder production recorded 676 tonnes in September, down 3.43% MoM and 11.4% YoY. The year-to-date production totaled 6,384 t, down 2.34% YoY.
Generally, the magnetic and alloy sectors' demand was less than expected, and the powder producers were not active in producing especially when the cost was flat. Hence some producers reduced the production as a response.
The cobalt powder production is estimated at 700 t in October. Mysteel estimates that the demand may not change much, but is expected to improve fractionally.
Lithium carbonate
China's lithium carbonate production dropped 11.9% month on month at 37,000 tonnes in September, per Mysteel survey.
The fall was partly attributed to the production cuts and suspensions initiated by some smelters which suffered losses when replying on outsourced spodumene. In addition, the smelters in Qinghai region also reported falling production as the summer was about to end. Lastly, the lithium carbonate extracted from scrap also sagged because several recyclers suspended the production on constantly falling salt prices.
The production is estimated to fall further by 5.4% MoM at 35,000 tonnes in October as the smelters in Qinghai will further reduce the production amid falling temperature, in addition to bearish lithium carbonate prices. And the demand is unlikely to revive in the month.
Lithium hydroxide
China's lithium hydroxide production also showed a monthly fall of 7.6% at 22,000 tonnes in September primarily because several smelters maintained low operating rates on high in-plant stocks when ternary cathode material demand was poor. In addition, a few smelters in Sichuan Province conducted maintenance, also contributing to declining production.
The lithium hydroxide production is estimated at 21,000 tonnes in October, down 4.5% from September as the operating rates are projected to remain low, learned by Mysteel.
Ternary precursor
China's ternary precursor production stood at 72,600 tonnes in September, down 8.04% MoM and 14.33% from last year. The production totaled 603,800 tonnes over January-September, edging up 0.47% YoY.
The precursor sector showed signs of subsiding already in September, and the manufacturers started to reduce the production in order to destock. Specially, the top-tier integrated manufacturers were able to maintain the production thanks to cost advantage, while the mid and small-sized ones suffered from high cost and gave up the orders to the large ones. Since the traditional peak season failed to pay off, the market players firmly slashed the production on pessimism.
It is expected that the ternary precursor sector will be caught up by seasonal low through October, featuring constantly falling demand in both China and overseas.
Ternary cathode material
China's ternary cathode materials production stood at 52,900 tonnes in September, down 2.53% MoM and 4.19% YoY. The production added up to 428,400 t over January-September, up 11.96% YoY.
When the battery cell manufacturers reduced the production across the board, especially the second-tier ones, the orders from China and overseas both dropped, indicating the early arrival of off-season.
The ternary cathode materials production is projected to fall 7.42% MoM and 19.26% YoY at 49,900 t in October.
LCO
China's LCO production was 8,190 tonnes in September, up 28.27% MoM and 45.99% YoY. The production totaled 52,645 t YTD, up 10.88% YoY. The operating rates of LCO producers increased with the launch of new mobile phone models, which, however, benefited mainly the top-tier producers. Some LCO producers were still troubled with poor demand. The production is likely to rebound in October with electronics sector improving.
Iron phosphate
China's iron phosphate production rose 3.08% MoM at 134,200 tonnes in September, as the production of established manufacturers rose with LFP manufacturers actively picking up goods.
The production is estimated to rise 2.81% MoM at 138,000 t in October as the downstream market is likely to stay flat.
LFP
China's LFP production edged up 1.08% from August at 152,300 tonnes in September. The production changed little from last month as the supply and demand were relatively balanced.
The production is estimated to inch up 1.87% at 155,100 tonnes in October as the LFP manufacturers are still relatively optimistic, but the end-market demand situation may weigh on the production slightly.
LMO
China's LMO production dropped 3.33% MoM at 7,200 tonnes in September because some smelters reduced the production for lack of profits when the cost declined significantly while the demand was flat.
Anode material
In September 2023, the production of anode materials by mainstream anode enterprises in China was about 107,600 tonnes, a decrease of 3.41% MoM and a YoY increase of 1.89%.
In September, the overall production of anode materials was fewer than expected, with a slight decrease compared to the previous month. The prices of downstream battery cell decreased largely, and some anode manufacturers had to sell off. The production and operating rates of a small number of manufacturers declined due to falling downstream orders.
According to Mysteel's estimate, the production in October 2023 will be around 102,500 tonnes, a decrease of 4.47% compared to the previous month as the demand has not shown signs of improving.
LiPF6
China's LiPF6 production dropped 6.2% MoM at 11,640 tonnes in September as the manufacturers were challenged by slowing end-market demand and falling lithium carbonate prices, hence they reduced the production to avoid excessive stocks.
The production is estimated to fall further by 3.09% MoM at 11,280 t in October as the demand growth is insignificant, which put most market players on the sidelines.
Electrolyte
China's electrolyte production added 4.87% MoM at 107,600 tonnes in September, as the downstream demand picked up, which prompted the manufacturers to ramp up the production.
Manganese sulfate
China's manganese sulfate production jumped 16.8% MoM at 23,250 tonnes in September, down 7.2% from last year. The operating rates among the manufacturers were high as their inventory was generally low, though downstream precursor producers still focused on destocking.
It is expected that the production will rise 12% MoM at 26,200 t in October as the downstream precursor manufacturers may lift the production, creating more demand for manganese sulfate.
Written by Aggie Hu, huchenying@mysteel.com