Three challenges for the overseas expansion of the Chinese cathode sector

Given the many factors exerting unfavorable pressure on the domestic market, many Chinese producers of ternary (nickel-based) cathodes and precursors are looking to capitalize on excess capacity by investing abroad. But while international expansion looks attractive, it brings its own problems.

Our latest report examines the challenges faced by Chinese producers of ternary cathode materials as they enter foreign markets.

Complete the form at the top of the page to download the full report – or read on for a quick summary:

The global oversupply of nickel-based cathodes and precursors is both global and structural

A slow economic recovery and slower-than-expected growth in electric vehicle (EV) sales meant a difficult 2023 for China’s domestic cathode and precursor makers. For ternary cathodes, pressure was added by volatile metal prices and production growth using lithium iron phosphate (LFP) chemistry.

However, the oversupply is not limited to the Chinese domestic market. Our analysis shows that in 2024, global production of nickel-based cathodes will be 1,453 kilotons (kt), of which 464 kt will be surplus to demand.

In our baseline scenario, we expect supply surpluses to persist until 2034, when annual production will reach 3,490 thousand. tons – partly thanks to new projects in South Korea and the USA (see chart below).