Drop in China's power battery loading volume hits battery metal market sentiment

Singapore — The loading volume of power batteries, a major consumer of battery metals, fell 59.6% on the year in China to 2.9 GWh over January-February, according to data released by the China Automobile Power Battery Industry Innovation Alliance on Wednesday.

The significant drop in power battery demand hit the battery metal market sentiment heavily and some market participants estimate that the gloom might extend into the coming two months.

S&P Global Platts assessed both battery grade 20.50% Co cobalt sulfate weekly prices at Yuan 54,000/mt ($7,770/mt) DDP China last Thursday, down Yuan 4,000/mt on the week.

The loading volume of ternary batteries fell 60.4% on the year to 2.1 GWh, while the volume of lithium iron phosphate, or LFP batteries dropped 54.1% to 0.8 GWh.

The loading volume of power batteries reached 0.6 GWh in February,, down by 73.4% from a year earlier and 74.2% month on month.

The loading volume of ternary batteries dropped by 71.8% on the year and 67% on the month to comprise 0.5 GWh of the total, while the volume of LFP batteries declined by 76.2% on the year and 89.4% on the month to 0.1 GWh.

Passenger car output and sales in February are forecast to have slid by more than 80% from a year earlier to below 300,000 units, according to the latest report released by China Association of Automobile Manufacturers. The figures might see a slight rebound in March and April as the spread of COVID-19 slows down. A significant improvement is expected to be seen in May if the spread of coronavirus is controlled by then, the report showed.

But it takes time to see the rebound in battery demand orders due to the long industry chain, some sources said. Sentiment in the battery metal market remains gloomy amid the shrinking orders from cathode material producers. An eastern China-based cobalt sulfate producer said that battery metal converters received few orders recently and inquiries remain sparse.