China’s Monthly Nickel, Cobalt, and Lithium Production Update

In October, China produced 178,800 tonnes of nickel sulfate, equivalent to 39,300 tonnes of nickel content, reflecting a 2.71% month-on-month (MoM) decline, according to a survey by Mysteel. The production was derived from various sources, including mixed hydroxide precipitate (MHP), high-grade nickel matte, and secondary nickel. The nickel sulfate production is expected to decline further in November due to seasonal demand reductions and lower profitability, with production estimated to reach 37,900 tonnes.

China's cobalt sulfate production in October was 19,527 tonnes, down 1.04% MoM and 10.13% year-on-year (YoY). Production cuts were attributed to high costs and sluggish downstream demand. The cobalt sulfate output is projected to further decrease to 18,750 tonnes in November as the market enters the off-season, featuring weak demand and reduced supply of recycled materials.

Cobalt chloride production in China was recorded at 22,033 tonnes in October, a decrease of 0.43% MoM, but an increase of 81.26% YoY. The demand for cobalt chloride did not meet expectations, and profit margins for producers have narrowed significantly. In November, production is likely to decline by 3.82% MoM to 21,700 tonnes due to slowing demand in the electronics and ternary materials sectors.

China's lithium carbonate production stood at 59,000 tonnes in October, down 3.6% MoM. Production in regions like Sichuan remained stable, while Jiangxi and Qinghai faced limitations due to raw material shortages and seasonal factors. Lithium carbonate output is expected to remain steady in November at 58,900 tonnes.

Lithium hydroxide production in China fell by 1.6% MoM to 21,400 tonnes in October. Due to weak demand for ternary precursors, production in November is likely to drop further by 5.8% MoM to 20,500 tonnes.

China's ternary precursor production in October fell by 4.71% MoM to 67,800 tonnes, with production expected to further decrease to 65,800 tonnes in November due to declining overseas demand and adjustments for potential order defaults.

The production of ternary cathode materials in China fell by 1.91% MoM to 57,000 tonnes in October, while a sharper decline of 6.32% MoM is anticipated in November, bringing the figure to 53,400 tonnes. This decrease is due to off-season market conditions and concerns about potential order defaults.

China's cobalt powder production increased by 3.97% MoM to 773.5 tonnes in October, with no significant change expected for November. The electrolytic cobalt production also slightly declined by 1.09% MoM to 5,101 tonnes in October, though it is anticipated to recover to 5,300 tonnes in November due to some producers operating at full capacity.

The production of cobalt oxide (Co3O4) in China dropped by 1.25% MoM to 8,660 tonnes in October. For November, Co3O4 production is expected to further fall to 8,330 tonnes.

Lithium manganese oxide (LMO) production in October was 9,030 tonnes, down 2.9% MoM, while lithium cobalt oxide (LCO) production was 9,460 tonnes, a decrease of 2.07% MoM. LCO production is expected to drop further by 11.63% MoM in November.

On a positive note, China's lithium iron phosphate (LFP) production increased by 7.8% MoM to 251,700 tonnes in October, driven by steady demand from the automotive and energy storage markets. Production is expected to rise further by 4.5% to 263,000 tonnes in November, supported by government vehicle trade-in programs and increasing energy storage installations.

China's anode material production was 112,100 tonnes in October, an increase of 6.03% MoM. Anode production is expected to continue rising to 114,600 tonnes in November, driven by strong downstream demand and preparation for early 2025 stockpiling.