Chinese NMC precursor producers are running at 57 percent utilisation at or below variable cost recovery. The investment case for non-Chinese pCAM cannot be built on market pricing arguments. It has to be built on subsidy capture, supply chain risk premium, and the utilisation recovery timeline.
NMC cathode precursor -- designated pCAM for precursor cathode active material -- is the nickel-cobalt-manganese hydroxide intermediate produced through co-precipitation of nickel sulphate, cobalt sulphate, and manganese sulphate at alkaline pH with ammonia complexant, generating hydroxide particles at 5 to 15 micrometre median size that are subsequently lithiated to produce NMC cathode active material at 850 to 900 degrees Celsius. The co-precipitation process is technically demanding: NMC811 production at 80 percent nickel content requires continuous pH control within plus or minus 0.02 units and temperature within plus or minus 0.5 degrees Celsius for 14 to 18 hours to achieve the core-shell nickel gradient structure that gives NMC811 thermal stability. The process engineering barrier limits commercial NMC811 pCAM to fewer than eight qualified global producers at full specification.
The price decline from USD 16.40 per kilogram in 2022 to USD 9.80 per kilogram in 2025 mirrors exactly what happened to LiPF6 electrolyte salt over the same period. Chinese producers invested simultaneously in 2022 to 2023 capacity expansions anticipating demand that did not materialise at projected 2024 and 2025 volumes. EV market growth in 2024 and 2025 came predominantly from LFP adoption rather than NMC adoption, meaning global NMC cell production grew more slowly than total EV battery production. NMC pCAM demand did not absorb the capacity expansion that producers had committed to. Total Chinese NMC pCAM disclosed capacity now exceeds 1.2 million tonnes per year against global demand of approximately 680,000 tonnes. At 57 percent utilisation across the Chinese pCAM industry, producers are running below the fixed cost absorption level required for positive operating margin at most facility configurations.
GEM Co. confirmed commissioning of 120,000 tonnes per year of NMC high-nickel pCAM at its Jingmen, Hubei facility in February 2026, bringing total GEM NMC pCAM capacity to 280,000 tonnes per year -- the largest single-company NMC pCAM capacity globally, supplying Samsung SDI, LG Energy Solution, and CATL with NMC622, NMC811, and NMC90 pCAM. At 280,000 tonnes per year, GEM has achieved the scale where co-precipitation reactor utilisation exceeds 85 percent throughout the annual production cycle regardless of broader Chinese industry utilisation conditions, providing overhead absorption and yield rate that smaller producers cannot match in a price trough.
The competitive advantage that allows GEM to sustain positive margin at USD 9.80 per kilogram ASP where primary feedstock-dependent producers cannot is its integrated recycling-to-pCAM value chain. GEM's battery black mass hydrometallurgical processing operations provide recycled cobalt sulphate and nickel sulphate at 8 to 15 percent below primary metal cost from processing end-of-life battery material. At nickel sulphate input cost of USD 11 to USD 14 per kilogram for primary feedstock in 2025, GEM's recycled nickel input at USD 9.35 to USD 11.90 per kilogram reduces pCAM variable cost by USD 0.52 to USD 1.40 per kilogram of NMC pCAM produced. At USD 9.80 per kilogram ASP, that recycled feedstock cost advantage is the difference between positive and negative variable cost margin for GEM versus producers entirely dependent on primary nickel sulphate supply.
Umicore confirmed expansion of its NMC pCAM production at Nysa, Poland to 50,000 tonnes per year in May 2025, targeting LG Energy Solution Wroclaw and Samsung SDI Hungarian cell programmes as the nearest European pCAM supplier by logistics distance. Posco Chemical confirmed commissioning of a 120,000 tonnes per year NMC high-nickel pCAM line at its Pohang facility in February 2025. POSCO Future M confirmed a Becancour, Quebec IRA-eligible pCAM facility targeting 2026 commissioning at 30,000 tonnes per year initial capacity under a GM Ultium Cells supply agreement confirmed in November 2024.
The estimated non-Chinese equivalent pCAM production cost at current scale ranges from USD 12.40 to USD 14.80 per kilogram for Korean producers (POSCO Future M IRA-eligible) to USD 16.00 to USD 18.00 per kilogram for European producers (Umicore Nysa) relative to Chinese ASP of USD 9.80. That is a 27 to 51 percent premium for IRA-eligible Korean pCAM and a 63 to 84 percent premium for European Umicore pCAM at current market conditions. For a US cell manufacturer claiming USD 35 per kilowatt-hour Section 45X production credit, paying USD 12.40 to USD 14.80 per kilogram for IRA-eligible pCAM on 70 to 90 kilograms of cathode active material per kilowatt-hour of cell capacity produces a pCAM cost premium of USD 0.18 to USD 0.36 per kilowatt-hour. Against the USD 35 per kilowatt-hour 45X credit, that premium is absorbed completely with USD 34.64 to USD 34.82 per kilowatt-hour net credit remaining. The economics work under 45X. Without it, the premium is financially unsustainable for commercial automotive cell programmes.
Chinese NMC pCAM capacity utilisation will not improve materially until global NMC cell production reaches 800 to 900 GWh per year from current estimated 380 GWh. At 15 percent annual NMC cell demand growth from current levels, that utilisation recovery takes until approximately 2028 to 2029. Between now and then, Chinese NMC pCAM ASP will remain under pressure from capacity overhang. Non-Chinese pCAM investment decisions being made in 2026 are being made against a pricing environment that reflects trough conditions. Investment cases need to be structured against mid-cycle NMC pCAM pricing of USD 12 to USD 14 per kilogram -- which represents the pricing environment expected when Chinese utilisation recovers to 80 to 85 percent in 2028 to 2029 -- and stress-tested at trough conditions of USD 9 to USD 10 per kilogram. The investment case cannot be built assuming trough pricing is the steady state. It also cannot assume recovery to USD 16.40 per kilogram 2022 pricing levels given the structural overcapacity condition that will persist even at 80 percent utilisation if the 1.2 million tonne capacity base continues expanding.
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GEM Co., China, confirmed commissioning of its 120,000 tonne per year NMC high-nickel pCAM line at Jingmen, Hubei, bringing GEM total NMC pCAM capacity to 280,000 tonnes per year, the largest single-company NMC pCAM capacity globally, targeting Samsung SDI and LG Energy Solution NMC90 cell programmes at nickel content above 90 percent by molar fraction.
Huayou Cobalt, China, confirmed qualification of its NCMA precursor at Tesla for 4680 NCA-to-NCMA chemistry transition at Gigafactory Texas, achieving aluminium content of 3.2 mol% in NCMA precursor at below 1 ppm iron impurity, the first Chinese NCMA precursor qualification at a US automotive gigafactory for an IRA-sensitive cell programme.
CNGR Advanced Material, China, confirmed full-year 2024 NMC pCAM revenue of CNY 8.4 billion from 180,000 tonnes of pCAM production spanning NMC622, NMC811, and NMC90 products, confirming CNGR as the second-largest Chinese NMC pCAM producer by revenue behind GEM Co. and providing the basis for Faradex Partners estimation of Chinese industry ASP at USD 9.80 per kilogram for NMC811 in 2025.
Umicore, Belgium, confirmed expansion of its NMC pCAM production at its Nysa, Poland facility to 50,000 tonnes per year, the largest single European NMC pCAM facility by capacity, targeting LG Energy Solution Wroclaw and Samsung SDI Goed EV cell programmes as the nearest European pCAM supplier by logistics distance to those gigafactory sites.
Posco Chemical, South Korea, confirmed commissioning of a 120,000 tonnes per year NMC high-nickel pCAM line at its Pohang, Gyeongbuk facility, the largest non-Chinese NMC pCAM capacity addition confirmed outside China in 2024 to 2025, targeting Samsung SDI and LG Energy Solution Korean domestic cell programmes at NMC811 and NMC90 specification.
General Motors and POSCO Future M confirmed a 10-year supply agreement for IRA FEOC-compliant NMC pCAM supply to Ultium Cells Ohio and Michigan cell manufacturing from POSCO Future M Canadian pCAM production at a new Becancour, Quebec facility targeting 2026 commissioning at 30,000 tonnes per year initial capacity, the first confirmed IRA-eligible automotive NMC pCAM supply agreement between a North American cell manufacturer and a Korean pCAM producer at a Canadian processing facility.
"GEM Co. 280,000 tonnes per year NMC pCAM capacity at integrated recycling cost is the competitive dynamic that makes non-Chinese NMC pCAM financially challenging even with IRA and EU NZIA subsidies. At 280,000 tpa, GEM has achieved the scale where co-precipitation reactor utilisation exceeds 85 percent throughout the annual production cycle, providing overhead absorption and yield rate that smaller producers cannot match. The recycled cobalt and nickel input at 8 to 15 percent below primary metal cost is the variable cost advantage that IRA subsidy offsets for POSCO Future M at Becancour but does not eliminate. GEM pCAM at USD 9.80 per kilogram versus POSCO Future M IRA-eligible pCAM at estimated USD 12.40 to USD 14.80 per kilogram is a 27 to 51 percent cost premium for the IRA-compliant product that GM Ultium Cells must absorb to qualify for the USD 35 per kilowatt-hour Section 45X production credit. The math works. The question is whether it works if 45X phases out and Chinese pCAM is still at USD 9.80."