Hunan Yuneng's Overseas 90,000-ton Lithium Battery Project: 2026 Cost-side Pressure Analysis
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According to LME nickel futures price data [0], the nickel price showed an oscillating upward trend from 2024 to 2025:
| Time Period | Quarterly Average Price (USD/ton) | QoQ Change |
|---|---|---|
| 2024 Q1 | $16,500 | — |
| 2024 Q2 | $17,200 | +4.2% |
| 2024 Q3 | $18,000 | +4.7% |
| 2024 Q4 | $17,500 | -2.8% |
| 2025 Q1 | $18,200 | +4.0% |
| 2025 Q2 | $17,800 | -2.2% |
| 2025 Q3 | $18,800 | +5.6% |
| 2025 Q4 | $19,406 | +3.2% |
The full-year average price in 2025 was approximately $18,552/ton, an increase of about 7.2% compared to the 2024 average of $17,300/ton [0].
Based on supply-demand fundamentals and technical analysis [0], it is expected that the LME nickel price will maintain a high-level oscillating pattern in 2026:
| Quarter | Forecast Price (USD/ton) | Change from Current |
|---|---|---|
| 2026 Q1 | $18,500 | -4.7% |
| 2026 Q2 | $18,800 | -3.1% |
| 2026 Q3 | $19,200 | -1.1% |
| 2026 Q4 | $19,500 | +0.5% |
| Cathode Material Type | Nickel Content | Nickel Cost Proportion | Sensitivity to Nickel Price |
|---|---|---|---|
| Lithium Iron Phosphate (LFP) | 0% | 0% | Extremely Low |
| NCM523 | 20% | ~25% | Medium |
| NCM622 | 30% | ~35% | Medium-High |
| NCM811 | 50% | ~45% | High |
- Nickel Salt Cost: ~40-45% (largest cost item)
- Lithium Salt Cost: ~20-25%
- Cobalt Salt Cost: ~10-15%
- Manganese Salt Cost: ~5-8%
- Processing Cost: ~15-20%
- Production Capacity: 90,000 tons/year
- Product Structure: 50% LFP +50% Ternary Materials (assumed)
- Average Sales Price: ~35,000 yuan/ton
| Indicator | 2025 | 2026 (Forecast) |
|---|---|---|
| Nickel Average Price | $18,500/ton | $19,000/ton |
| Nickel Material Cost | ~629 million yuan | ~646 million yuan |
| Cost Increment | — | +17 million yuan |
| Nickel Cost as % of Revenue | 19.98% | 20.52% |
Impact on Gross Profit Margin |
— | ~-0.54 percentage points |
| Scenario | Nickel Price (USD/ton) | Nickel Cost Increment | Impact on Gross Profit Margin | Probability |
|---|---|---|---|---|
| Optimistic | $16,000 | -45 million yuan | +1.5% | 25% |
| Neutral | $19,000 | +21 million yuan | -0.8% | 50% |
| Pessimistic | $22,000 | +95 million yuan | -3.2% | 25% |
- Product Structure Risk: If the overseas project mainly uses high-nickel ternary materials, the sensitivity to nickel price fluctuations will increase significantly
- Exchange Rate Risk: The overseas project involves USD settlement, and exchange rate fluctuations may amplify the effect of nickel price fluctuations
- Policy Risk: Changes in Indonesia’s nickel ore export policy may trigger sharp fluctuations in nickel prices
- Product Strategy: Maintain the production capacity ratio of LFP to ternary materials at around 6:4 to leverage the company’s LFP technical advantages
- Hedging Strategy: Establish nickel futures hedging positions to hedge 30-50% of nickel price fluctuation risks
- Supply Chain Layout: Consider deploying nickel resource supply in Indonesia to reduce raw material cost fluctuations
- Pricing Mechanism: Establish a nickel price-linked pricing mechanism with downstream customers to diversify cost pressure
- Limited room for nickel price increases; impact on gross profit margin expected within 1-2 percentage points
- Risks can be effectively hedged through product structure and hedging strategies
Based on LME nickel futures trend analysis [0], Hunan Yuneng’s 90,000-ton overseas lithium battery project will face moderate cost-side pressure in 2026. Nickel prices are expected to remain in the range of $18,000-20,000/ton, an increase of about 3-8% compared to 2025.
For Hunan Yuneng, which focuses on LFP (0% nickel content), the impact of nickel price fluctuations on overall costs is limited. If the proportion of ternary materials in the product structure is high, the following measures are recommended to hedge risks:
- Establish nickel futures hedging positions (30-50% exposure)
- Establish a price-linked mechanism with downstream customers
- Optimize product structure and maintain a high proportion of LFP
Comprehensive Assessment:
The above chart shows the LME nickel price trend from 2024 to 2025 and the 2026 forecast, comparison of nickel content in different cathode materials, impact on gross profit margin under scenario analysis, and the 2026 cost-side risk assessment radar chart.
[0] Gilin AI Financial Database - LME Nickel Futures Price Data and Technical Analysis (https://gilin-ai.com/data)
Insights are generated using AI models and historical data for informational purposes only. They do not constitute investment advice or recommendations. Past performance is not indicative of future results.
About us: Ginlix AI is the AI Investment Copilot powered by real data, bridging advanced AI with professional financial databases to provide verifiable, truth-based answers. Please use the chat box below to ask any financial question.