China's output and newly-installed volume of power batteries hit fresh highs in August from rapid developments in the country's new energy vehicle (NEV) industry.

Power battery production rose by 161.7pc from a year earlier to 19.5GWh in August, with installed volume up by 144.9pc to 12.6GWh, according to data from the China Automotive Manufacturers Association (CAAM).

Production and installed volume of lithium iron phosphate batteries were 11.1GWh and 7.2GWh respectively, both exceeding volumes of 8.4GWh and 5.3GWh for ternary (NCM/NCA) batteries.

Total output of power batteries rose to 111.5GWh during January-August, up by 201pc compared with the same period last year, while installed volumes gained 176.3pc to 76.3GWh over the same period. Production and installed volume of lithium iron phosphate batteries in this year's first eight months were 58.1GWh and 35.2GWh respectively, accounting for 52.1pc and 46.2pc of the total volumes, compared with 53.2GWh and 40.9GWh for ternary batteries.

China's CATL, BYD and China Aviation LB were the top three battery manufacturers for installed volumes during January-August, with 37.9GWh, 11.9GWh and 5GWh respectively, accounting for 49.7pc, 15.6pc and 6.6p.

The domestic NEV industry has maintained rapid growth since the second half of 2020 when the country eased its Covid-19 lockdown measures. China has been accelerating development of NEVs to achieve its carbon emission peak by 2030 and carbon-neutral targets by 2060.

The country produced 309,000 NEVs in August, up by 180.6pc from a year earlier and by 8.8pc from July, with sales up by 181.9pc over the same period and by 18.6pc from July to 321,000, exceeding 300,000 units for both monthly output and sales for the first time, according to CAAM. Total output reached 1.813mn during January-August, up by 192.8pc on the year, with sales moving up by 194pc to 1.799mn units.

Robust demand from the NEV sector has bolstered lithium and cobalt feedstock prices. Argus on 9 September assessed prices for 99.5pc grade lithium carbonate and 56.5pc grade hydroxide, which are essential raw materials in production of lithium-ion batteries used in electric vehicles, higher at 138,000-145,000 yuan/t ($21,231-22,308/t) ex-works and Yn138,000-144,000/t ex-works respectively, hitting a three-year high.

Australian spodumene producer Pilbara Minerals held an auction on 29 July for its inaugural spodumene concentrate on its digital Battery Material Exchange with auction sale concluded at $1,250/dmt fob Port Hedland for a spot cargo of 10,000dmt of 5.5pc spodumene concentrate from the Pilgangoora project. The company will hold its second auction for 8,000dmt of 5.2-5.5pc lithium concentrates on 14 September and market participants expect the concluded price to be much higher than $1,250/dmt, which will extend gains in lithium prices in the short run.

Cobalt sulphate, another key battery ingredient, was last assessed at Yn77,000-80,000/t ex-works on 9 September, up by 38.9pc since the start of 2021 on tight feedstock supply.