Car manufacturers in China produced 2.56 million units in June, up by 9.8% from May and up 2.5% compared with June 2022. Sales increased by 10.1% month on month and by 4.8% year on year to 2.62 million units – the highest monthly sales figure since 2022, according to the China Association of Automobile Manufacturers (CAAM) data released on Tuesday July 11.
For the first half of 2023, China’s automobile output rose by 9.3% year on year to 13.25 million units while sales jumped by 9.8% in the same comparison to 13.24 million units.
The electric vehicle (EV) sector also continued to recover in June, with the combined output of pure EVs, hybrid EVs and fuel-cell EVs increasing by 32.8% compared with June 2022 to 784,000 units in June this year.
China’s EV sales rose by 35.2% year on year to 806,000 units in June – the highest single-month sales figure so far this year.
EV output increased by 42.4% year on year to 3.79 million units in January-June, while sales rose by 44.1% to 3.75 million units, accounting for 28.3% of total car sales in the first half of the year.
China’s car exports also remained at high levels in June, despite dipping 1.7% from May’s record high to 382,000 units – a year-on increase of 53.2%.
That brought the export volumes for the first half of this year to 2.14 million units, with EVs accounting for nearly a quarter of the total at 534,000 units.
The moderate recovery in the broad economy and the stellar performance in EVs and car exports, have helped bolster China’s automotive market; and with stimulus measures starting to have an impact, the nation’s car industry is expected to achieve stable growth this year, CAAM said.
The industry body said it expects China’s EV sales to reach 9 million units for the whole year in 2023.
Steel cold-rolled (CRC) prices rise to two-month high
Fastmarkets’ weekly price assessment for steel CRC, domestic, ex-whs Eastern China was 4,500-4,530 ($631-635) yuan per tonne on Friday July 14.
The latest assessment is up from 4,440-4,490 yuan per tonne on June 9 and marks the highest level in nearly two months.
Higher prices for steelmaking raw materials, Beijing’s latest financial support for the property sector and the nation’s stronger-than-expected financial data for June have recently underpinned steel prices, but continued weakness among end users will weigh on prices, market participants said.
CRC inventories held by traders in 21 major Chinese cities totaled 1.18 million tonnes by the end of June, up by 20,000 tonnes (1.7%) from 10 days earlier, according to data from the China Iron & Steel Association.
Leading Chinese steelmakers including Baoshan Iron & Steel said on July 10 that they would raise their CRC base prices by 100 yuan per tonne for August’s domestic bookings compared with the previous month.
A recovery in the new energy vehicle market, coupled with higher demand for air-conditioning units in summer, have boosted demand for flat steel, especially CRC, and are encouraging mills to raise their offers, an industry analyst in eastern China said.
Aluminium ADC 12 market stable
China’s domestic aluminium ingot alloy ADC12 market has stayed relatively flat in an inactive spot market.
Fastmarkets’ price assessment for aluminium alloy ADC12, exw dp China rose to 17,800-18,200 yuan ($2,485-2,541) per tonne on July 12, widening up from 17,800-18,100 yuan per tonne a week earlier. The price was at 17,900-18,100 yuan per tonne at the beginning of June.
The recent slight rise was mainly driven by higher prices for aluminium scrap in the country, while spot trading stayed quiet, sources told Fastmarkets.
“The [domestic] ADC 12 market is flat. Demand from the aluminium product producers that supply the leading automobile manufacturers remains stable. But beyond that, there have not been any active spot inquiries,” an ADC 12 supplier said.
“The ADC 12 price has been around 18,000 yuan per tonne for more than a month. Without a significant demand increase, the market [is unlikely to] improve,” a second ADC 12 supplier said.
Sources said they kept a close eye on the production and sales of automobile producers in the country and hoped that the improvements in the automotive industry would continue for the rest of the year, which would lend support to the alloys market.
EV battery materials market update
Consumer caution started to emerge in China’s lithium market from mid-June, which ended the price uptrend that had been in place since the end of April.
Chinese lithium carbonate consumers were mostly restocking before mid-June after destocking for most of the first half of the year, thereby keeping prices on an uptrend.
Sentiment turned more cautious from mid-June, however, when consumers started to purchasing spot units only on a hand-to-mouth basis, sources said, who also expressed concern over near-term demand because restocking has now been completed and real demand shows no signs of improving.
“It’s uncertain how demand [will be] in July and we are afraid to purchase any more spot material than we need, in case demand doesn’t improve in the near term,” a second Chinese cathode producer said.
Elsewhere in the hydroxide market, market participants reported persistent weak demand due to the sluggish performance of the downstream nickel cobalt manganese (NCM) battery sector.
Fastmarkets’ price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 288,000-310,000 yuan per tonne on Thursday, widening downward by 2,000 yuan per tonne from 290,000-310,000 yuan per tonne a week earlier, and down by 10,000-12,000 yuan per tonne from 300,000-320,000 yuan per tonne on June 1.
Fastmarkets’ price assessment for lithium hydroxide monohydrate, LiOH.H2O 56.5% LiOH min, battery grade, spot price range exw domestic China was 270,000- 290,000 yuan per tonne on Thursday, narrowing downward by 10,000 yuan per tonne from 270,000- 300,000 yuan per tonne a week earlier, and down by 20,000-30,000 yuan per tonne from 290,000-320,000 yuan per tonne on June 1.
Prices for another battery raw material, cobalt sulfate, continued on an uptrend in June, meanwhile, driven by rising raw materials prices due to short-term tight availability and improved downstream buying.
Fastmarkets’ price assessment for cobalt sulfate, 20.5% Co basis, exw China was 46,000-47,000 yuan per tonne on Wednesday July 12, up by 2,000 yuan per tonne from 44,000-45,000 yuan per tonne on July 7, and 9,000 yuan per tonne higher than the 37,000-38,000 yuan per tonne seen on June 2.
“Supported by rising [costs for the] raw material, cobalt hydroxide, and short-term tight spot availability, more cobalt sulfate producers are pushing up their prices. At the same time, some downstream buyers have also started to restock cobalt sulfate for fear of further increases,” a cobalt sulfate producer said.
Most sellers of cobalt hydroxide, the regular feedstock for cobalt sulfate, either had only limited spot availability or withheld sales considering production costs in June, which led to higher prices in the market.
Fastmarkets’ weekly calculation of the cobalt hydroxide index, 30% Co min, cif China was at $9.49 per lb on July 7, up by $0.80 per lb from $8.69 per lb on June 30. The index was at $7.57 per lb on June 2.
In the nickel sulfate market, meanwhile, there was a modest recovery in demand in China through June, with previous losses recouped at the start of the month, before an upward run of four weeks – although the uptrend paused in the end month.
Fastmarkets’ weekly price assessment for nickel sulfate, min 21%, max 22.5%; cobalt 10ppm max, exw China, averaged 32,700-33,500 yuan per tonne in June, an increase of 4.25% compared with May.
Sources attributed this to restocking activity, with downstream consumers resuming production thanks to a cooling price war among automakers.
“Although spot liquidity is thin, some major precursor plants are running out of feedstock, which pushed up [prices],” a precursor producer source told Fastmarkets.
“The recovery is primarily supported by restocking activities,” a battery producer source said, but added that there was no real change in downstream demand as yet.
The flake graphite market, meanwhile, has been experienced a downtrend in June, due to slow demand downstream buyers.
Fastmarkets’ latest weekly price assessment for graphite flake 94% C, -100 mesh (-194), fob China was $610-654 per tonne on July 13, down by 2.02% from a month earlier.
On the same day, Fastmarkets’ price assessment for graphite spherical 99.95% C, 15 microns, fob China was at $2,000-2,200 per tonne, stable since the start of June.
The price for spherical graphite has been steady for the past couple of weeks after hitting an 11-year low at the start of June. It’s now approaching the bottom again, with only very limited or even negative profit margins for producers, according to a spherical graphite producer source in China.
“But slow downstream demand for spherical graphite and buyer intentions to bid at very low levels will continue to dampen liquidity, with supplies still sufficient following the restart of operations at Luobei in Heilongjiang province – a major production hub for the flake fines used in anode production,” a graphite producer source in China added.
“Lower sourcing prices from anode makers indicate that spherical graphite producers need to secure flake graphite at a lower level to keep their profit margins, albeit at low level. And this would result in their shift to flake graphite with lower carbon content to reduce costs, adding further pressure to the -194 flake graphite market,” the source added.
In terms of manganese sulfate, another key raw material for battery manufacturing, the price was mostly stable through June, albeit with a slight upward adjustment, due to improving demand from downstream cathode producers.
The market has started to see some downside pressure stepping into July, however, with two consecutive drops in the past couple of weeks.
Fastmarkets’ latest price assessment for manganese sulfate 32% Mn min, battery grade, exw mainland China was 5,000-5,800 yuan ($696-807) per tonne on July 13, down by 4.42% from the previous assessment.
“Producers [now have] relatively sound operational rates, while demand from cathode producers remains subdued due to high inventories… hence less buying interest. Most buyers tend to source materials only on a hand-to-mouth basis or stay on the sidelines before the market direction becomes clear,” a manganese sulfate producer source in China said.
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