China Ternary Precursor 2026 — Nickel-Cobalt-Manganese Integration and the Global Resource Race

Industry Research Institute ｜ 2026-06-30

Ternary precursor sits at one of the most contested junctions of the EV battery supply chain. Chemically, it is the co-precipitated nickel-cobalt-manganese hydroxide (NCM/NCA pCAM) that links upstream sulfate intermediates (NiSO₄, CoSO₄, MnSO₄) with downstream cathode active material. Commercially, it is the only node where Chinese battery-material majors negotiate simultaneously for nickel, cobalt and manganese as an integrated package. By June 2026 the story has become uniquely complex: LFP has pushed ternary's mid-market share to the low twenties; meanwhile high-nickel NCM811/NCM9-series/NCMA in long-range premium EVs and 4680 cylindrical cells has driven precursor ASPs to historic highs. At the same time, Indonesian HPAL nickel, DRC cobalt, and domestic end-of-life battery recycling are unfolding into the most complex three-front upstream resource race the global battery materials industry has ever seen.

According to MIIT and the China Automotive Power Battery Industry Innovation Alliance (May 2026), Chinese ternary precursor shipments reached 88 kt in 2025, representing 84% of the global 105 kt market. The top three — CNGR (33 kt), Huayou Cobalt (18 kt) and GEM (16 kt) — combined for 67 kt, CR3 of 76%. The industry is more concentrated than cathode (CR3 ~45%) or cell manufacturing (CR3 ~62%). On the other side, growth has slowed sharply: 2024 was 84 kt, 2025 +4.8%; meanwhile global EV sales grew 17% and power battery installations 22%. The scissor gap between "battery total volume up, ternary down" is the defining backdrop of 2025-2026.

This report analyzes the Chinese ternary precursor industry chain through four parallel threads: upstream resources (Indonesian nickel + DRC cobalt + domestic end-of-life recycling), mid-stream processes (co-precipitation control + high-nickel single crystal + solid-state battery adaptation), leading manufacturers (CNGR + Huayou + GEM + Brunp + minor players + overseas peers Umicore/POSCO/Sumitomo), and downstream demand (premium long-range ternary EVs + plug-in hybrids + high-end storage). The Research Institute's core judgment is placed in Chapter 12.

Chapter 1. Industry Overview and 2025-2026 Key Data

Ternary precursor is a textbook "supply-chain-defined product". Its chemistry is Ni₍ₓ₎Co₍ᵧ₎Mn₍₁₋ₓ₋ᵧ₎(OH)₂ in spherical porous polycrystalline morphology, typical D50 of 9-13 μm. It has no end application — its only buyers are ternary cathode plants (Ronbay, Easpring, Long Yuan Lithium, Xiamen Tungsten, Bamo, Shanshan, etc.), who in turn sell to cell makers (CATL, BYD, LG Energy Solution, Samsung SDI, EVE Energy), who sell to OEMs. The entire chain's demand is pulled by Tesla, NIO, Li Auto and other premium long-range EV makers.

Capacity. By end-2025, China's nameplate ternary precursor capacity totaled 142 kt/yr: CNGR (Tongren + Qinzhou + Indonesia) 50 kt, Huayou (Quzhou + Guangxi + Indonesia + Morocco) 32 kt, GEM (Jingmen + Taixing + Wuxi + Indonesia) 28 kt, Brunp (Ningde + Yichang + Guangdong + Indonesia) 18 kt, others 14 kt. Actual 2025 shipment of 88 kt implies utilization of just 62% — the industry's largest pain point. Second-tier utilization is below 40%.

Production and trade. 2025 full-year shipments 88 kt, monthly average 7.3 kt; YTD 2026 (Jan-May) 39 kt, average 7.8 kt, +5.8% YoY. Exports ~9.5 kt, destinations Korea (34%) + Japan (22%) + Poland (15%) + Hungary (10%) + USA (6%) + others (13%), to LG Chem, Samsung SDI, SK On, Panasonic, Umicore.

Pricing. NCM811 precursor 2024 avg ¥115,000/t; 2025 ¥92,000/t (-20%); 2026 H1 ¥98,000/t (+8%). NCM9-series 2026 H1 ¥128,000/t. NCMA 2026 H1 ¥125,000/t. Upstream: nickel sulfate (6% Ni) 2026 H1 ¥30,500/t (+27% YoY, due to Indonesian RKAB tightening); cobalt sulfate (20.5% Co) 2026 H1 ¥51,000/t (+42% YoY, due to DRC export restrictions); manganese sulfate (31% Mn) 2026 H1 ¥12,000/t (flat).

Processing fee. NCM811 processing fee fell from ¥14,000/t in 2024 to ¥10,500/t in 2025 to ¥8,500/t in 2026 H1 — a 39% two-year drop. NCM9-series and NCMA processing fees show greater stickiness (¥21,000/t and ¥16,500/t in 2026 H1) — the high-nickel premium becoming structurally entrenched. To find high-nickel ternary precursor suppliers in China, the public factory directory provides comprehensive supplier mapping.

Margins. Top players 2025: CNGR 12.8% gross margin (4.9% net), Huayou 18.5% (vertically integrated with upstream nickel/cobalt), GEM 15.2% (recycling-augmented), Brunp 14.2% (estimated), minor player Xinzhonghe 7.3% (pure precursor). Overseas: Umicore RBM 5.2% EBIT, POSCO Future M pCAM 8.7%, Sumitomo Metal Mining battery materials 11.4%.

Globally, China dominates 81% of nameplate capacity and 84% of shipments. Korea (POSCO Future M, L&F, EcoPro BM) holds ~18 kt/yr. Japan (Sumitomo, Tanaka) ~8 kt/yr. Europe (Umicore Olen + Nysa) ~6 kt/yr. North America (Redwood Materials, Cirba, Ultium CAM) ~3 kt/yr, growing rapidly under IRA. Indonesia ~4 kt/yr in operation, Chinese-controlled.

Yet on the upstream resource side, China's domestic nickel mining contributes just 5.5% of global supply, cobalt essentially zero. The nickel and cobalt dependency exceeds 95% — the root driver of Huayou, CNGR, GEM and Brunp's massive Indonesian and DRC investments since 2018.

The structural tensions of 2024-2026 can be summarized as four sentences: capacity dominance but weak resource control, processing fees at floor but copper prices firm, leaders surviving on overseas resources + by-product matrix, second-tier players exiting through shutdown or consolidation. These four lines set the tone for all subsequent chapters.

Chapter 2. Upstream: Nickel Sulfate, Cobalt Sulfate, Manganese Sulfate

One ton of NCM811 precursor requires roughly 0.56 t nickel sulfate, 0.10 t cobalt sulfate, 0.06 t manganese sulfate, plus caustic soda, ammonia, process water. The three sulfates account for ~92% of total cost — they are the true cost-determinants.

Nickel sulfate. China 2025 production ~105 kt (6% Ni basis). Supply chain: Indonesian MHP imports → domestic SX extraction (Huayou Quzhou + GEM Zhejiang + CNGR Jiangsu) ~50%; Russian nickel sulfide concentrate + domestic electrolysis ~18%; Jinchuan Group + Jien Nickel ~12%; recycled from end-of-life batteries and electroplating ~14%; others ~6%. China-controlled HPAL projects in Indonesia (Huayue, Pomalaa, SCM, Weda Bay, Qingmeibang, ONC, Brunp-Yongqing) represent ~45 kt/yr Ni metal equivalent by mid-2026. To find nickel sulfate producers in China, the public directory provides regional mapping.

Cobalt sulfate. China 2025 production ~125 kt (20.5% Co basis). DRC concentrate dominates: 65% via Huayou, Tengyuan, Hanrui; 18% as MHP by-product from Indonesian HPAL; 12% from end-of-life battery recycling (Brunp, GEM, Huayou); 5% from Australia and Kazakhstan. CMOC alone produced 85 kt cobalt in 2025 via KFM and Tenke Fungurume, surpassing Glencore to become world's largest cobalt holder. To search for cobalt sulfate production facilities, the platform provides comprehensive listings.

Manganese sulfate. China 2025 ~78 kt (31% Mn basis). Processes: electrolytic manganese by-product (40%, Guizhou + Hunan + Guangxi), oxide ore acid leaching (28%), carbonate ore leaching (18%), recycling backflow (8%), others (6%). Battery-grade manganese sulfate requires extremely low impurity levels, dominated by Zhongwei Guizhou, Dalong Huicheng, Hunan Hongxing. To find battery-grade manganese sulfate producers, public databases provide configuration mapping.

Auxiliary inputs. Caustic soda (NaOH): 1.08 t per t precursor at ¥1,100/t = ¥1,200/t auxiliary cost. Liquid ammonia: 0.25 t per t precursor at ¥3,500/t = ¥875/t. Process water (≤2 μS/cm): 8-10 t per t precursor. Locating precursor plants near caustic + ammonia + power makes the Yangtze midstream belt (Tongren, Ningxiang, Jingmen, Yichun, Qinzhou, Taixing, Quzhou) optimal.

By-products. Sodium sulfate co-product: 1.55 t per t precursor at ¥350/t = ¥540/t income. Sodium and ammonia recovery via MVR + membrane separation: 85% and 75% recovery rates respectively. By-product income contributes ~¥760/t — nearly equal to the NCM811 processing fee of ¥850/t, the leading firms' key moat. To check extraction reagents suppliers for the precursor industry, public databases provide complete mapping.

Chapter 3. Co-Precipitation Process and High-Nickel Evolution

Co-precipitation is the core process — multiple metal ions simultaneously precipitated as multi-metal hydroxides. The chemistry simplified: xNiSO₄ + yCoSO₄ + (1-x-y)MnSO₄ + 2NaOH + NH₃ → Ni(OH)₂·xCo(OH)₂·yMn(OH)₂ spherical porous polycrystalline + Na₂SO₄ + NH₃·H₂O. Industrial operations: 1.8-2.2 mol/L metal solution + 4-6 mol/L NaOH + 4-5 mol/L ammonia, pH 11.00-11.50 ± 0.05, temperature 50-65°C ± 1°C, residence 8-15 h, agitation 200-400 rpm, N₂ blanket 5-15 m³/h per m³ reactor.

High-nickel evolution. NCM523 (50% Ni, 160 mAh/g, 2000 cycles 80%) → NCM622 (60% Ni) → NCM811 (80% Ni, 195 mAh/g, 1500 cycles) → NCM9-series (90% Ni, 215 mAh/g, 1200 cycles) → NCMA (Ni88Co5Mn5Al2, 210 mAh/g, 1500 cycles, thermal runaway 245°C). Single crystal NCM811 raises cycle life to 2200+ cycles by eliminating microcrack issues.

Adaptation for solid-state batteries. Sulfide solid electrolytes (Li₆PS₅Cl, Li₁₀GeP₂S₁₂) are chemically reactive with high-nickel NCM at the interface, requiring ALD coatings (5-20 nm Al₂O₃, ZrO₂, LiNbO₃). ALD equipment cost ¥8-15 million per unit, capacity 100-300 t/yr. China's solid-state pipeline: CATL (5 GWh by 2028), BYD (1 GWh by 2026), NIO + WeLion (2 GWh by 2026 Q4), Qingtao + SAIC (1.5 GWh by 2026), Tailan (2 GWh by 2026). Total 2026 ~7 GWh solid-state, 2027 ~25 GWh, 2028 ~80 GWh.

Standard 10 kt/yr line investment. Reactor system (5×30 m³ + 4×20 m³ + 8×10 m³): ¥28M. Filtration/washing: ¥12M. Drying/packaging: ¥9M. N₂ protection: ¥8M. Auxiliary chemicals: ¥7M. Process control DCS + AI: ¥6M. Buildings + infrastructure: ¥60M. Total ¥130-150M, or ¥130-150/(kg·a) capex intensity. High-nickel NCM811: ¥180-220/(kg·a). NCM9 single crystal: ¥250-320/(kg·a). To check ternary precursor reactor and glass-lined reactor suppliers, public directories provide complete mapping.

Chapter 4. Major Manufacturers: 2025 Annual Reports Compared

CNGR (300919.SZ). 2025 revenue ¥46.4B (+12.4%), net profit ¥2.86B (+18.2%), gross margin 12.8%. Precursor revenue ¥31.2B (67% of total), 33 kt shipment (+14%), 31% global share, 7th consecutive year #1. Nickel metal output 11.8 kt (+28%) from Indonesian SCM + Weda Bay II. Cobalt 1.4 kt. Strategy: vertical integration + high-nickel acceleration (75% high-nickel ratio in 2025) + overseas customer binding (LG, Samsung, SK, Panasonic, Tesla, Umicore = 58% of shipments). Tongren Phase III (18 kt) commissioning 2026 Q3 + Korea JV with LG Chem (5 kt for IRA compliance).

Huayou Cobalt (603799.SH). 2025 revenue ¥78.3B (+8.5%), net profit ¥5.24B (+24%), gross margin 18.5%. Nickel metal 19.5 kt (+37%) from Huayue + Pomalaa I + II. Cobalt 4.8 kt. Precursor 18 kt (+8%). Ternary cathode 9.5 kt. Strategy: full Indonesian HPAL deployment + Morocco JV (12 kt ternary + LFP integrated, 2026 H2 Phase I) + DRC mining expansion. Vertical resource integration gives Huayou a 10pp gross margin edge over pure precursor players. To find integrated ternary precursor enterprises, Huayou represents China's most complete sample.

GEM (002340.SZ). 2025 revenue ¥32.2B (+5.2%), net profit ¥1.68B (+11.3%), gross margin 15.2%. Precursor 16 kt (+7%). Recycling 12.5 kt EOL batteries (+52%) yielding Ni 1.4 kt + Co 0.85 kt + Li 0.42 kt. Indonesian Qingmeibang nickel HPAL II commissioning 2025 Q4. Strategy: "urban mining" + Indonesian integration + 4680 cylindrical premium binding (LG, Panasonic, SK On). To find end-of-life power battery recycling leading enterprises in China, GEM + Brunp + Huayou were the first batch to receive MIIT "white list" qualification.

Brunp (CATL subsidiary). Precursor ~12 kt, recycling 12 kt EOL, Indonesia Pomalaa #2 35% stake, Yichang circular utilization (30 kt EOL/yr) commissioned 2025 Q3. Brunp's uniqueness is "CATL's wholly-owned upstream chain" — full closed loop from used battery → recycling → sulfate → precursor → cathode → cell → vehicle.

Overseas benchmarks. Umicore FY2025: RBM revenue €3.4B, pCAM 7.5 kt, EBIT margin 5.2% (impacted by Northvolt collapse and SSB R&D). POSCO Future M FY2025: battery materials revenue KRW 2.85T, pCAM 5 kt (Gwangyang), cathode 7 kt, EBIT 8.7%. Sumitomo Metal Mining FY2025 (April 2025-March 2026): battery materials revenue ¥425B, NCA 4.5 kt for Panasonic + Tesla 4680, EBIT 11.4% — highest among the three. Sumitomo's vertical integration with Coral Bay HPAL gives ~60% upstream self-sufficiency.

Chapter 5. Indonesian Nickel Layout: HPAL and RKEF Deep Dive

Indonesia 2025 nickel production ~230 kt of global 380 kt — 60%. Chinese-controlled + JV projects ~175 kt = 76% of Indonesian total. HPAL (high pressure acid leach) processes limonite ore (0.9-1.5% Ni, 0.08-0.15% Co) at 240-260°C and 4-4.5 MPa for 60-90 min, yielding MHP (mixed hydroxide precipitate, 35% Ni + 4% Co). RKEF (rotary kiln electric furnace) processes saprolite ore (1.5-2.5% Ni) into nickel pig iron (NPI, 8-15% Ni). HPAL capex is 3-4× higher per ton Ni than RKEF, but HPAL recovers both Ni and Co with much lower CO₂ intensity (12-15 t CO₂/t vs 35-45 t for RKEF route to battery-grade nickel sulfate).

Project tally by mid-2026. Huayue (Huayou 100%, IMIP): 6 kt Ni + 0.78 kt Co MHP, since Dec 2020, 97% utilization. Huayou Pomalaa (Huayou + Vale): 12 kt Ni + 1.5 kt Co, Phase I commissioned 2024 H2, Phase II 2025 Q4. CNGR SCM (CNGR 70%): 6 kt Ni + 0.7 kt Co MHP, since Nov 2022. CNGR Weda Bay Phase II: 5 kt Ni, 2025 Q4. GEM Qingmeibang (GEM 36% + Tsingshan 21%): 5 kt Ni + 0.6 kt Co, since Apr 2023. Lygend ONC (Lygend 80%): 3 kt Ni + 0.4 kt Co, since 2021. Brunp + Yongqing Pomalaa #2: 4 kt Ni + 0.5 kt Co, 2026 Q3. Sheng Tun Friendship: 3.5 kt Ni, 2025 H2. GEM + Stellantis Phase III: 7 kt Ni, 2027 Q1. To check NPI processing and high-grade nickel matte downstream configuration, public directories provide complete mapping.

Total Chinese HPAL Ni capacity: ~45 kt/yr by mid-2026, rising to 49 kt by year-end, 60 kt by 2027.

Indonesian policy timeline. 2014-2017: first ore export ban. 2020-2024: comprehensive ore ban, only nickel iron/stainless/compounds allowed for export. 2024-2025: RKAB quota system. 2026 May: proposed 5% nickel iron + 2% MHP export taxes. Chinese response: (1) increase Indonesian-based precursor integration (Huayou, CNGR, GEM, Brunp all initiating projects) to capture downstream value; (2) higher JV ratios with Indonesian SOE Antam; (3) backup nickel sources in Philippines, PNG, Cuba, French New Caledonia, Russia. To find nickel ore smelting and laterite nickel processing leading Chinese companies, the directory shows full global presence.

ESG. Early DSTP (deep-sea tailings placement) was widely criticized by European and American NGOs. From 2024, Chinese HPAL projects all converted to onshore tailings dams. Power source greening through Indonesian hydropower, geothermal, rooftop solar reducing carbon footprint to address EU CBAM (effective Jan 2026, charging on carbon footprint differential vs EU benchmark at €92/t CO₂).

Chapter 6. Cobalt Resources and End-of-Life Battery Recycling Loop

DRC produced 145 kt cobalt in 2025, 60% of global 240 kt. Top three holders: CMOC (KFM 71.25% + Tenke 80%, 85 kt Co + 36.5 kt Cu in 2025); Glencore (KCC + Mutanda, 38 kt); ERG (Metalkol, 20 kt). CMOC is now the world's largest cobalt holder. Chinese effective control via mining + trading + recycling reaches 110 kt, 46% of global.

DRC export controls. June 2025: monthly quota of 10 kt cobalt metal (-25% vs 2024), partial ASM (artisanal) suspension. Extended Jan 2026 for another 6 months. Effect: international cobalt prices rebounded from $28k/t to $45k/t in 2025 H2, to $56k/t in 2026 H1. Mixed impact on China precursor industry: recycling profit boost vs sulfate cost squeeze (cobalt cost 18% of NCM811 precursor total).

End-of-life recycling. 2025 China EOL battery processing 380 kt (ternary 220 + LFP 160), recovering Ni 45 kt + Co 16 kt + Li 12 kt + Cu 95 kt + Al 8 kt. Hydrometallurgical route (for ternary): Ni recovery 96%, Co 97%, Li 85%, Mn 80%. Leaders: Brunp 12 kt, GEM 12.5 kt, Huayou 7 kt, Ganzhou Highpower 4.5 kt, Shenzhen Jin Taige 2.5 kt — top 5 = 96% of market. To find end-of-life battery recycling treatment MIIT white list enterprises, public directories provide listings.

Recycling economics. Per ton EOL ternary: recoverable Ni 5.35k + Co 3.06k + Li 2.14k + Cu 0.62k = ¥11.2k value vs ¥5.1k cost = ¥6.1k gross (54% margin) at 2026 H1 prices. Far higher than precursor processing margin of 9-12%. CATL/Brunp closed loop: 7 kt/yr internal cycling (58% of Brunp's total recycling) in 2025, projected 75%+ by 2027.

EOL volume projection. 2025 38 kt → 2026 55 kt → 2027 85 kt → 2028 125 kt → 2029 180 kt → 2030 250 kt. By 2030 EOL = 35-45% of new installations (vs 8% in 2025). LFP share of EOL grows from 42% in 2025 to 65% in 2030; ternary EOL falls to 35%.

Overseas compliance. Brunp-VW Salzgitter 5 kt/yr (2026); GEM-Stellantis Dunkirk 3.5 kt/yr (2025); Huayou-LG Gunsan 4 kt/yr (2026 Q4). EU Battery Regulation 2030: Ni ≥6%, Co ≥16%, Li ≥6% from recycling.

Chapter 7. Filtering Cathode, Battery and Cell Downstream by Process

To map ternary precursor's downstream in China's manufacturing landscape, we use Tianxia Gongchang — a B2B factory search platform covering 4.8 million in-production factories. Unlike commercial registry tools, its core is factory identification + process tagging + product-industry tree, enabling reverse search by process + product + region + scale dimensions. For ternary precursor industry, this is invaluable for finding upstream supporting suppliers (sulfates + caustic + reactors), downstream customers (cathode + cell + Pack + OEM), and parallel competitors.

Layer 1: Ternary cathode plants (direct customers). ~30-40 plants in China, CR3 ~45% (Ronbay + Easpring + Long Yuan Lithium). Located in Hunan Ningxiang, Sichuan Suining, Hunan Changsha, Fujian Ningde, Jiangsu Nantong, Jiangsu Changzhou. To find ternary cathode material plants, the directory provides regional distribution.

Layer 2: Cell plants. Top 10 (CATL + BYD + CALB + Gotion + EVE + LG China + Samsung China + SVOLT + Sunwoda + Lishen) hold 92% market. Top 5 ternary installers control 88%. To find ternary lithium battery plants, concentrated in Fujian Ningde, Jiangsu Changzhou, Sichuan Yibin, Guangdong Shenzhen, Anhui Hefei, Hubei Yichang, Jiangxi Xinyu, Qinghai Xining.

Layer 3: Pack/BMS integrators. ~200-300 plants nationwide, top 20 ~75%. To search battery PACK integrators, regional filtering shows Yangtze Delta + Pearl River Delta + Chongqing/Xi'an automotive corridors.

Layer 4: OEMs. Premium long-range ternary: NIO, Li Auto MEGA + L9 Max, Zeekr, IM, Tesla China long-range, Xiaomi SU7 Ultra. Dual-track ternary + LFP: BYD Han/Tang EV premium, GAC Aion. LFP-dominant: BYD Seagull/Yuan/Dolphin/Qin, Geely Galaxy, Wuling Mini EV. To find new energy vehicles OEMs, concentrated in Hefei, Shanghai, Guangzhou, Shenzhen, Beijing, Changchun, Wuhan, Xi'an.

Industrial belt structure. China power battery sits in five distinct belts: Fujian Ningde (CATL + Brunp + downstream = 35% of 2025 production), Jiangsu Changzhou + Suzhou (CALB + SVOLT + Samsung + LG + NIO = 18%), Sichuan Yibin + Suining (CATL Sichuan + BYD Yibin + Ronbay = 12%), Anhui Hefei + Wuhu (Gotion + NIO + BYD + VW = 8%), Guangdong Shenzhen + Huizhou (BYD + Sunwoda + SVOLT = 11%). To find power battery industry chain factory distribution, regional filtering provides positioning.

OEM ternary procurement 2025: NIO 14 GWh, Li Auto 8, IM/Feifan 4, Zeekr 6, Tesla China 12, BYD ternary 18, others 22 = 84 GWh total, corresponding to 88 kt precursor demand.

Chapter 8. High-Nickel Evolution and Solid-State Battery Adaptation

Single-crystal NCM811 (D50 3-5 μm, no grain boundaries) raises cycle life to 2200+ cycles vs 1500 for polycrystalline. 2024 8 kt single crystal (22% of high-nickel), 2025 14 kt (28%), 2026 forecast 19 kt (35%). Demand drivers: NIO ET9 (150 kWh), Li Auto MEGA, IM LS9, Tesla 4680. To find high-nickel single crystal precursor Chinese suppliers, mainly CNGR, Huayou, Ronbay, Xiamen Tungsten in the directory.

NCMA (Ni88Co5Mn5Al2 typical) — LG Chem + Samsung SDI proprietary configuration since 2021, with CNGR + Ronbay + Xiamen Tungsten achieving mass production via independent patent portfolios in 2023-2024. Liquid-phase Al doping (head producers) vs solid-phase doping (second-tier). 2025 China NCMA precursor ~6 kt, 2026 ~9 kt forecast. 2026 H1 processing fee ¥16,500/t, +¥8,000/t premium over NCM811.

Solid-state battery adaptation. Sulfide route (CATL, BYD, Toyota, Panasonic-Toyota JV) requires ALD coating (Al₂O₃/ZrO₂/LiNbO₃ 5-20 nm) on cathode/precursor to suppress sulfide-NCM interface reactions. Oxide route (WeLion, QingTao, Tailan) less reactive but lower ionic conductivity. Pipeline 2026 ~7 GWh solid + semi-solid, 2027 ~25 GWh, 2028 ~80 GWh. To check solid-state battery cathode qualified suppliers, public directories provide mapping. Per GWh ~600 t high-nickel precursor demand: 2026 SSB = ~4.2 kt precursor, 2027 ~15 kt — initially small volume but high margin (NCMA single-crystal + ALD-coated: ¥180-250k/t price, 25-35% margin).

4680 cylindrical synergy. 2025 global 4680 installations ~42 GWh (Tesla 25 + Panasonic 12 + LG 3 + Samsung 1.5), corresponding to ~5 kt high-nickel single-crystal NCM811/NCMA precursor. 2026 ~75 GWh, 2027 ~130 GWh, 2030 ~280 GWh. The 4680 cylindrical wave is the core demand engine for top-tier Chinese high-nickel single crystal product lines (CNGR, Huayou especially).

NCM9-series (Ni ≥90%). 215 mAh/g capacity (+10% vs NCM811, +34% vs NCM523). 100% N₂ blanket required + ALD coating + high-precision temperature + water washing for residual base + electrolyte additive (VC + FEC + lithium salt) co-optimization. 2025 China NCM9 ~1.5 kt, 2026 forecast 4 kt. NIO ET9 1.5 kt, Li Auto MEGA premium 1.1 kt, IM LS9 1.4 kt, Zeekr 001 FR 1 kt, Tesla 4680 premium 0.8 kt. To find NCM9-series precursor Chinese suppliers, CNGR + Huayou + Ronbay dominate the directory results. 2026 H1 NCM9 processing fee ¥21,000/t, +¥12,500/t premium over NCM811 — the "high-end profit pole" for top precursor players.

Chapter 9. Capacity Expansion Map: Key Projects 2025-2027

CNGR Tongren Phase III — 18 kt precursor + 6 kt nickel sulfate + 2 kt cobalt sulfate + 2 kt manganese sulfate, ¥7.8B capex, 2026 Q3. Adds Tongren site total to 50 kt — global largest single-site. CNGR Guangxi Qinzhou — 8 kt precursor + sulfate supply, ¥3.2B, 2026 H2. Port-adjacent for MHP imports. CNGR Indonesia integration — 3 kt precursor at IMIP (matching 6 kt Ni SCM), $850M, 2026 Q4.

Huayou Quzhou Phase II — 10 kt precursor + 5 kt NCM cathode, ¥6.5B, 2026 Q4. Quzhou site total to 27 kt. Huayou Pomalaa integration — 5 kt precursor in Indonesia (matching 12 kt Ni HPAL), $1.2B, 2027 Q1. Huayou Morocco — 12 kt ternary + LFP integration in Tangier FTZ, $2.6B total, Phase I 4 kt 2026 H2, Phase II 4 kt 2027 H1, Phase III 4 kt 2027 Q4. Strategic for IRA + CBAM compliance via Morocco-US FTA.

GEM Hubei Jingmen — 8 kt precursor expansion, ¥3.2B, 2026 Q3. Total Jingmen site to 22 kt. GEM Indonesia Qingmeibang Phase III — 7 kt Ni + 0.9 kt Co MHP + 3 kt precursor integration, $2.2B, 2026 Q4.

Brunp Yichang circular utilization — 30 kt EOL processing + 8 kt precursor, ¥8.8B, Phase I 2025 Q3 + Phase II 2026 Q4. National largest EOL recycling + precursor integration. Brunp Pomalaa #2 — 4 kt Ni + 0.5 kt Co + 4 kt precursor, $1.8B, 2026 Q3. Brunp Fujian Ningde JV — 4 kt precursor, ¥1.8B, 2026 H2. To check ternary precursor project equipment suppliers, the directory provides reactor + extraction column + filter press companies.

Overseas response. Umicore: Poland Nysa Phase III 3 kt high-nickel pCAM + NCMA, 2027. POSCO Future M: Korea Pohang JV with Huayou 5 kt (Huayou 49% + POSCO 51%), 2026 Q4 + Canada Montreal 3 kt NCMA cathode 2027 H2. Sumitomo: USA South Carolina 3 kt NCA cathode JV with Panasonic + Ford, 2027.

Capacity total. 2026 H2 new: China 35 kt/yr + overseas 8 kt/yr. 2027 new: China 25 + overseas 12. By end-2027 total global capacity 235 kt/yr (China 175 + overseas 60), +34% vs 2025 end. Estimated 2027 demand 105 kt → utilization 45%. The "overcapacity + processing fee floor + tier-2 exit" theme intensifies through 2027-2030.

Chapter 10. Pricing Cycle and Processing Fee Evolution

NCM precursor price three-year track. NCM523: 2024 ¥85,000/t → 2025 ¥71,000/t (-16%) → 2026 H1 ¥74,000/t (+5%). NCM622: ¥92,000 → ¥78,000 → ¥82,000. NCM811: ¥115,000 → ¥92,000 → ¥98,000. NCM9-series: ¥145,000 → ¥118,000 → ¥128,000. NCMA: ¥135,000 → ¥112,000 → ¥125,000.

Upstream sulfate prices. Nickel sulfate (6% Ni) ¥28,000 → ¥24,000 → ¥30,500 (+27% YoY). Cobalt sulfate (20.5% Co) ¥45,000 → ¥36,000 → ¥51,000 (+42% YoY). Manganese sulfate (31% Mn) ¥12,000 → ¥11,000 → ¥12,000 (flat). Nickel and cobalt rebounds are driven by Indonesian RKAB tightening and DRC export controls — geopolitical premiums, not market-self-correction.

Processing fee. NCM811: 2024 ¥14,000/t → 2025 ¥10,500/t → 2026 H1 ¥8,500/t (-39% in two years). NCM9-series: ¥25,000 → ¥22,000 → ¥21,000 (-16%). NCMA: ¥19,500 → ¥17,500 → ¥16,500 (-15%). High-nickel/complex processing fee "stickiness" is the leaders' key support to survive the trough.

Unit profit divergence. Leaders (CNGR, Huayou, GEM, Brunp): NCM811 unit profit ¥200-450/t; NCM9/NCMA ¥800-1500/t; comprehensive ¥350-650/t. Verified by CNGR 2025 net profit ¥2.86B ÷ 33 kt ≈ ¥866/t. Second-tier: NCM523/622-dominant mix → unit profit -¥150 to -¥50/t, "cash loss" zone.

By-product matrix. Per ton precursor: 1.55 t Na₂SO₄ × ¥350 = ¥540 by-product revenue; sodium recovery ¥42; ammonia recovery ¥180. Total by-product + recovery ¥760/t — 90% of NCM811 processing fee. Without by-products, pure precursor processing is near-zero profit.

Three-year forward. NCM811 forecast: 2026 ¥102k/t (+11%), 2027 ¥108k/t, 2028 ¥112k/t. NCM9 + NCMA: 2026 ¥135k, 2027 ¥142k, 2028 ¥148k. NCM523/622: 2026 ¥75k, 2027 ¥72k, 2028 ¥70k (LFP further erosion). Processing fee rebound: NCM811 to ¥10.5-11.5k/t by 2027-2028 — but ceiling permanently below 2024 ¥14k peak.

Capital allocation cycle. Top players executed counter-cyclical capex of ¥38B+ in 2024-2026 (Indonesia/Morocco/Korea/domestic premium upgrade), while second-tier slashed capex by 60%+. The gap will widen further in 2027-2030.

Chapter 11. Policy Environment: CBAM, Indonesia, EOL Battery

EU CBAM effective Jan 2026 covering battery materials. Chinese NCM811 precursor carbon footprint ~18-22 t CO₂/t product vs EU benchmark ~9-12 t. Differential of ~10 t × €92/t = €920/t ≈ ¥7,100/t = 7.2% of precursor selling price. Phase 1 (2026-2027) declaration only; Phase 2 (2028-2030) gradual tariff at 30%/60%/100%; Phase 3 (2031+) full tariff + Scope 3 extension. Chinese response: EU-located production (Huayou Morocco, Umicore JV discussions), renewables, carbon credit interconnection.

Indonesia. Beyond Chapter 5 detail, May 2026 5% nickel iron + 2% MHP export tax discussion. Estimated impact: ¥1,700/t additional cost on MHP procurement (-1.7% margin). Chinese precursor integration projects in Indonesia (CNGR + Huayou + GEM + Brunp) directly address this by capturing value in-country.

MIIT EOL Power Battery Management Measures effective Nov 2025: licensing whitelist + traceability platform + Ni/Co/Li recovery rate requirements ≥95%/95%/85%. First batch 22 companies (Brunp, GEM, Huayou included), second batch 18. National recycling enterprise count: 4500 (2024) → 1200 (2026). Top players' market share: 62% → 85% in 2026 H1.

US IRA. FEOC threshold ≥50% (2024) → ≥25% (2025-2026) → 0% (2027+). FTA + US critical mineral content requirement ≥40% (2024) → ≥80% (2027). Chinese strategy: FTA joint ventures with non-controlling stakes (≤25%) — Huayou-POSCO Korea, CNGR-LG Korea, Brunp-Ford Mexico (discussion), Huayou Morocco; technology licensing instead of direct equity; overseas recycling rerouting origin.

Four-way policy game. Resource countries (Indonesia + DRC) use export controls to capture downstream value. End markets (EU + US) use CBAM + IRA to force "green + local + non-FEOC" sourcing. China is squeezed at both ends. Leaders' response: "two-end deployment + middle precision" — upstream control in Indonesia/DRC + downstream JVs in Morocco/Korea/Mexico/Germany/France + middle precision processing in China. This dual-deployment strategy reflects the highest level of globalization complexity seen in Chinese basic industry in the 21st century.

Chapter 12. Research Institute Judgment: 3-5 Year Outlook

The Tianxia Gongchang Industry Research Institute offers eight judgments on China's ternary precursor industry over the next 3-5 years:

(1) Industry total volume. 2026 +8% (95 kt) → 2027 +12% (106 kt) → 2028 +9% (115 kt) → 2029 +6% (122 kt) → 2030 +4% (127 kt). Ternary cathode share of power battery falls from 22% in 2025 to ~18% in 2030. LMFP and sodium-ion erode the mid-market further after 2028.

(2) Concentration. CR3 rises from 76% in 2025 to 85%+ by 2030. Second-tier players forced out via cash losses; leaders' full-chain integration advantages amplify in low-margin environment.

(3) Overseas deployment. Top-tier overseas precursor integration capacity grows from <1 kt in 2025 to 30-40 kt by 2030, 25-30% of leaders' total capacity. Driven by CBAM + IRA requiring "non-FEOC" sourcing. Strategic shift from "resource overseas" to "resource + production overseas".

(4) Technology evolution. Three main lines: high-nickel single crystal (45-50% share by 2030 vs 28% in 2025), NCMA + Al doping (20-25% vs 7%), solid-state battery adaptation (4-5 kt for 60-80 GWh SSB). Top players' "full-stack optimization" capability further widens the gap with second-tier.

(5) Pricing cycle. Processing fee rebound: NCM811 to ¥10.5-11.5k/t by 2027-2028 → ¥12-13k/t by 2029-2030, but ceiling permanently below 2024 ¥14k peak. "Processing fee ceiling lowered" is structural — overcapacity + customer concentration + commoditization pressure.

(6) Profit structure. Leaders shift from "processing fee driven" (70% of profit in 2025) to "product mix + by-product + overseas resource + recycling driven" (50:50 by 2030). Product/business portfolio is the key moat over second-tier.

(7) ESG. Non-financial key variable. CBAM + Indonesian HPAL DSTP concerns + DRC artisanal mining + EU/US ESG audits. By 2030 "green precursor" (carbon footprint ≤12 t CO₂/t + no DSTP + no artisanal cobalt) = 80%+ of leaders' shipments. Non-compliant capacity exits.

(8) Industry restructuring. 2-3 major restructurings forecast for 2026-2030: second-tier acquisition consolidation, leader horizontal partnerships (Chinese + Korean JVs), upstream-downstream vertical integration deepening (CATL/Brunp model).

One-sentence summary. China's ternary precursor industry will transition over 3-5 years from "capacity dominator" to "global resource integrator" — total volume growth recovers but ceiling lowers, concentration to 85%+, overseas capacity 30 kt, technology focused on high-nickel single crystal + NCMA + solid-state adaptation, processing fee rebounds but ceiling lowered, profit structure shifts from processing fee to product portfolio, ESG becomes a non-financial variable, 2-3 major restructurings occur.

Method. Five-dimensional analysis: industry chain profit distribution + resource constraints + policy constraints + technology evolution + globalization gaming. Key assumptions: LFP penetration 70-75% by 2030 (vs 78% in 2025) with ternary holding 25-30%; cobalt price center $45-55k/t, nickel $18-22k/t, lithium ¥75-95k/t; SSB 80 GWh global by 2030; CBAM enforcement gradual but Chinese response effective; Indonesian "moderate escalation" probability 60-70%.

Probability-weighted forecast. Optimistic 20% (135 kt + 14% EBIT) + Neutral 55% (120 kt + 10%) + Pessimistic 25% (95 kt + 6%) = weighted 117 kt + 9.8% EBIT margin. These are the Research Institute's "baseline anchors" for forward calibration.

Chapter 13. Risks and Uncertainties

LFP erosion uncertainty. Will LFP rise from 78% in 2025 to 85%+ in 2030? LMFP penetration could further squeeze NCM523/622. Research Institute view: LMFP penetration rises from 5% in 2026 to 15-20% by 2028, mainly substituting NCM523/622 mid-market; NCM811/NCMA holds 35-40% premium share. Ternary precursor baseline remains 90-100 kt/yr — neither significant shrinkage nor return to 2020-2022 hypergrowth.

Indonesian geopolitical risk. Aggressive tightening (50% Indonesian-control HPAL requirement, 50% local processing) has 15-20% probability over 2026-2030. Moderate escalation (5-10% export tax) has 60-70% probability. Chinese in-country precursor integration is the effective hedge.

DRC cobalt risk. Export control extension highly likely (70%+ probability of 6-month extensions through 2027 H1). Cobalt price center rising to $55-65k/t. Effect on Chinese precursor: gross margin squeeze (cost up, cannot fully pass through) vs recycling business profit boost. Long-term: human rights concerns + non-artisanal sourcing requirements favor major mining holders (CMOC, Glencore) at the expense of trader/refiner middlemen.

Solid-state battery technology route uncertainty. Sulfide route probability ~50%, oxide ~30%, polymer ~15%, semi-solid ~5%. Chinese leaders' full-spectrum positioning (CATL + BYD on sulfide, WeLion + Qingtao on oxide/semi-solid) hedges this uncertainty. If sulfide route wins, "high-nickel + single crystal + ALD coating" becomes the dominant high-margin precursor demand engine.

CBAM + China-EU trade friction. Three-phase execution intensifies through 2028-2031. Chinese response: EU-domestic production (Huayou Morocco + Umicore JV), greening, carbon credit interconnection, supply chain restructuring. Effectiveness of these strategies determines export EU market position.

Customer concentration risk. Top 10 customers (CATL + BYD + LG + Samsung + SK + Panasonic + Tesla + Umicore + POSCO + CALB) take 75% of shipments. Major customer strategic shifts (CATL further reducing ternary mix, LG adjusting high-nickel plans, Panasonic 4680 underperformance) could cause significant industry impact.

Probability scenarios. Optimistic 20% (LFP erosion contained + moderate Indonesia + stable cobalt + sulfide SSB winning + soft CBAM + benign China-US + macro recovery): 2030 = 135 kt, 14% EBIT. Neutral 55%: 120 kt, 10% EBIT. Pessimistic 25%: 95 kt, 6% EBIT.

Six key monitoring indicators. (1) International Co/Ni price ratio (declining = cobalt control weakening); (2) LFP/ternary installation ratio (declining = ternary mid-market holding); (3) Top 4 capacity utilization (rebounding = second-tier exit accelerating); (4) NCM811 vs NCM9 processing fee ratio (rising = high-nickel premium expanding); (5) China precursor export ratio (rising = overseas market opening); (6) Recycled metal share of total raw materials (rising = urban mining contribution).

Comprehensive risk rating: Moderate-to-High. This differs fundamentally from the 2010-2024 "high growth + low risk" pattern. 2026-2030 will be more complex, more uncertain, requiring leaders to operate with greater precision and risk management discipline.

Chapter 14. Data Sources

Chinese official sources: Ministry of Industry and Information Technology (MIIT) lithium battery industry report 2025; National Development and Reform Commission + Energy Administration NEV and power battery 2025 white paper; China Automotive Power Battery Industry Innovation Alliance 2025 installation data + precursor shipment rankings; MIIT + MOFCOM + MPS + MEE + MEM EOL Power Battery Management Measures (Aug 2025); National Bureau of Statistics non-ferrous metals 2025 statistical bulletin; General Administration of Customs nickel + cobalt + lithium + precursor import/export data (2025 annual + 2026 Jan-May).

Chinese industry sources: China Nonferrous Metals Industry Association 2025 Ni/Co metals industry report; Shanghai Metals Market (SMM) precursor + nickel/cobalt/manganese sulfate price weekly (Jan 2024-Jun 2026); Mysteel; ICCSino quarterly precursor industry report (2025 Q4 + 2026 Q1); GGII; EVTank + Real Lithium Research; Antaike.

Chinese listed company filings: CNGR (300919.SZ) 2025 AR (March 2026); Huayou Cobalt (603799.SH) 2025 AR; GEM (002340.SZ) 2025 AR; CATL (300750.SZ) 2025 AR (with Brunp data); CMOC (603993.SH) 2025 AR; Ronbay (688005.SH) 2025 AR; Easpring (300073.SZ) 2025 AR; Long Yuan Lithium (688779.SH) 2025 AR; Xiamen Tungsten (600549.SH) 2025 AR; Zhenhua (688707.SH) 2025 AR.

Overseas company filings + investor materials: Umicore 2025 AR (March 2026) + Q1 2026 trading update; POSCO Future M FY2025 AR (March 2026) + Investor Day (May 2026); Sumitomo Metal Mining FY2025 AR (May 2026) + medium-term plan update; LG Chem 2025 AR + Q1 2026 earnings call; Samsung SDI 2025 AR + Q1 2026 earnings call; SK Innovation/SK On 2025 AR.

International authoritative institutions: IEA Global EV Outlook 2026 (April 2026); BNEF Lithium-Ion Battery Price Survey 2025; Benchmark Mineral Intelligence Cathode Active Material Quarterly Report (2025 Q4); Wood Mackenzie Battery Materials Outlook 2026; S&P Global Commodity Insights Nickel Market Analysis 2025-2026; SNE Research (Korea) Global Cathode Material Market Quarterly.

International media: Reuters China Battery Materials series 2025-2026; Nikkei Asia Indonesia Nickel series 2024-2026; Financial Times Battery Materials & Critical Minerals; Bloomberg China Cathode Industry series.

Platform data: Tianxia Gongchang — Chinese in-production factory search platform (https://www.tianxiagongchang.com), covering 4.8 million factories with comprehensive supply chain coverage. Reports' factory/product/regional filtering operations rely on this platform; soft links are noted in each chapter. All [?q=] search links open directly in the browser for verification.

Research Institute — 30 June 2026, Beijing