China's power battery output, installed volumes rise

China's production and newly-installed volume of power batteries increased significantly in July supported by the rapid development in the country's new energy vehicle (NEV) industry.

July power battery production rose by 185.3pc from a year earlier to 17.4GWh, with installed volume up by 125pc to 11.3GWh, according to data from the China Automotive Manufacturers Association (CAAM).

Production and installed volume of lithium iron phosphate batteries were 9.3303GWh and 5.7986GWh respectively, exceeding ternary batteries volumes for the first time of 7.9862GWh and 5.4547GWh respectively.

Total output of power batteries rose to 92.1GWh during January-July, up by 210.9pc compared with the same period of last year, while installed volumes rose by 183.5pc to 63.8GWh for the same period.

China's CATL, BYD and South Korea's LG Chem were the top three battery producers for installed volumes during January-July, with 31.42GWh, 9.55GWh and 4.92GWh respectively, accounting for 49.3pc, 15pc and 7.7pc of the total.

The domestic NEV industry has maintained fast growth since the second half of 2020 when the country eased its Covid-19 lockdown measures, with China accelerating development of NEVs to achieve its carbon-neutral targets by 2060.

The central government has extended subsidies on NEVs for two years to the end of 2022 and exempted their purchase tax for 2021-22. The country produced 284,000 NEVs in July, up by 170.8pc from a year earlier, with sales up by 164.4pc to 271,000 over the same period, according to CAAM. Total output rose to 1.504mn for January-July, up by 195.6pc on a year earlier, with sales rising by 197.1pc to 1.478mn units.

CAAM forecasts the country's NEV sales to hit 2.4mn units in 2021 compared with an earlier prediction of 1.8mn units. This could bolster demand for lithium-ion batteries and metal feedstocks particularly cobalt, lithium, nickel and graphite in the longer term.

Prices have extended gains in response to rising lithium concentrate prices pushed up by tighter spodumene feedstock supplies and firm demand from the electric vehicles and energy storage sectors. The range for 99.5pc grade lithium carbonate moved higher to 95,000-99,000 yuan/t ($14,670-15,290/t) ex-works today from Yn94,000-98,000/t ex-works on 10 August. Market participants expect it will take time for new supplies to enter the market while a number of lithium concentrates and lithium salts producers are boosting capacity, forecasting that lithium prices will keep rising given supply shortages and robust demand.

Prices for 56.5pc grade lithium hydroxide increased to Yn110,000-115,000/t ex-works today, up by Yn2,000/t ex-works on 10 August, driven by tighter supplies and buoyant demand from the electric vehicle sector.

China power batteries (GWh) Jul &#39;21 y-o-y &#177; % m-o-m &#177; % Jan-Jul &#39;21 &#177; % Total production 17.4 185.3 14.2 92.1 210.9 NCM/NCA 8.0 144.0 8.6 44.8 148.2 LFP 9.3 236.2 20.0 47.0 51.1 Total newly-installed volume 11 125 2 64 184 NCM/NCA 5.5 67.5 -8.2 35.6 124.3 LFP 5.8 235.5 13.4 28.0 333.0 Source:CAAM

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