China's new energy vehicle sales continued their record growth in July, even as concerns around tightening supply of a key raw material are expected to keep lithium prices elevated in the second half of 2021, sources said.
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China's NEV sales reached 271,000 units in July, up 164.4% on the year and 5.8% higher from the previous month, the China Association of Automobile Manufacturers, or CAAM, said Aug. 11.
NEV output also surged 170.8% on the year to 284,000 units in July, and the figure was up 14.3% on the month, according to CAAM data.
In the first seven months of 2021, China's total NEV output and sales amounted to 1.5 million and 1.64 million units, up 195.6% and 197.1%, respectively, compared with the same period last year.
Both monthly NEV output and sales have been seeing an increase on an annual basis for the 13th consecutive month now.
NEV sales are expected to see a rapid growth in 2021, according to sources.
China's NEV sales are set to reach 2.4 million units in 2021, up 76% from a year earlier, CAAM said in July. Some sources have an even more bullish outlook and expect sales to reach as high as 2.8 million units in the year.
Accelerated NEV sales are also expected to lend strong support to Chinese metals demand, such as aluminum, copper and battery metals, sources said.
Meanwhile, lithium chemicals output could fall in the near term due to supply tightness of spodumene and power shortages, according to sources.
An uptick in demand amid tightening supply has continued to drive prices higher across the lithium chain.
S&P Global Platts assessed battery-grade lithium carbonate at Yuan 100,000/mt ($15,418/mt) and lithium hydroxide at Yuan 110,000/mt on Aug. 10, up Yuan 500/mt and Yuan 7,000/mt, respectively, from Aug. 6 levels. Both assessments were on a DDP China basis.
Small buyers that generally buy spot cargoes are facing price increases, said an eastern China-based lithium chemicals producer Aug. 11.
Several producers are sold out of August-delivery cargoes, leaving spot buyers scrambling for alternatives amid an expected downstream battery production ramp-up through September.
Meanwhile, China's output of power battery -- the major consumer for battery metals -- hit 17.4 GWh in July, up 14.2% on the month and 185.3% from a year earlier, according to separate data released by the China Automobile Power Battery Industry Innovation Alliance.