Chinese exports of lithium-nickel-cobalt-manganese-oxide (NCM) battery material increased in response to strong overseas demand in the first five months of 2021. China exported 27,434t of NCM material during January-May, up by 105pc from a year earlier, with the average export price rising by 4.8pc from a year ago to $22/kg, according to customs data. Electric vehicle (EV) sales in and outside China have surged since the start of this year compared with 2020, bolstering global NCM demand.
China's NCM exports mainly went to Asian countries, including South Korea and Japan, before 2018. Major battery manufacturers LG Chem, Samsung, SKI and CATL have been actively building lithium battery production plants in countries such as Poland, Hungary and Germany in recent years, resulting in higher export sales of Chinese NCM to lithium battery production facilities in the EU.
As much as 44pc of China's NCM exports went to Poland in 2020, surpassing South Korea as the biggest importer of Chinese material. The ratio to Poland dropped during January-May this year because of the country's stricter Covid-19-related lockdown and quarantine measures since early April. Market participants expect China's NCM exports to the EU to rise significantly when the epidemic eases considering firm demand from rapid developments in the EV industry in Europe.