China's new energy passenger car manufacturing and sales maintained record levels in June, and this trend is expected to remain strong over the coming months, industry sources told S&P Global Commodity Insights.
China's NEV and Passenger Car Sales in June
According to data released by the China Passenger Car Association, or CPCA, on July 8, the wholesale sales of new energy passenger cars in China reached 571,000 units in June, an increase of 141.4% year on year and 35.3% month on month.
New energy passenger vehicles were hybrids and pure electric vehicles. However, EVs that are sold in large car showrooms are regarded as wholesale sales.
China's passenger car retail sales totaled 1.94 million units last month, up 22.6% on a yearly basis and 43.5% on a monthly basis, CPCA data showed.
The recovery in production in the aftermath of the pandemic, together with government policies, were among key reasons for increased vehicle sales in June, the CPCA said.
“China’s passenger car production in July may be 20 percent higher than a year earlier as output at local automakers is recovering,” the association said.
China Association of Automobile Manufacturers, another key automobile industry body, said it was confident the NEV sales in China would likely meet the target of 5 million units in 2022, up 47% year on year.
S&P Global estimates 2022 China EV sales of 6.4 million units, more than double 2021 volume. Some industry sources also forecasted about 6 million units of NEV sales for China this year.
Lithium Prices
Domestic lithium chemicals prices would go up because of robust EV sales, given they'll remain high despite the dip, sources said.
The Chinese domestic lithium market remained stable in the week ended July 8, sources said, and demand recovery was still lower than expected. Still, lithium prices are at all-time highs.
Battery-grade lithium carbonate was assessed at Yuan 470,100/mt ($70,128/mt) on July 8 on a delivered, duty-paid China basis, unchanged day on day but down Yuan 4,900/mt on the week, according to the Platts assessment from S&P Global.
Lithium hydroxide and carbonate prices diverged on differing downstream demand from nickel-manganese-cobalt, or NMC, and lithium iron phosphate, or LFP, battery end markets.
Demand for NMC batteries one among a myriad of different types of batteries used in EVs, was noticeably weaker than for LFP batteries despite bull market demand and a recovery in the broader Chinese EV market. The NMC version was a microcosm of a similar trend for demand in other battery applications.
Battery-grade lithium hydroxide was assessed at Yuan 460,100/mt, stable day on day but down Yuan 4,900/mt week on week.
