Two Major Super Battery Plants Terminated

The main focus in March shifted from the volume after resuming production to whether costs could be passed on and if orders were sustainable. With a general increase in raw material prices, battery prices also diverged due to different pricing models: battery manufacturers using a formula-linked mechanism found it easier to pass on costs at the financial level; whereas those with fixed-price contracts experienced more significant profit compression. However, most enterprises chose not to push price negotiations to the extreme in Q1, instead opting to leave more room for discussions to be concentrated after the New Year. This strategy led to a situation where, on the surface, the industry chain in March was still in production and making deliveries, but profit pressures were accumulating internally, and the real contradictions were merely postponed rather than resolved. As a result, market expectations for Q2 began to diverge in March: optimists saw new vehicle cycles and production schedule resilience, while the cautious were more concerned about the potential for profits to be affected first if sales did not materialize.

Although March traditionally marks a demand recovery period and represents the final deadline for "export rush" orders ahead of policy changes, leading to a significant MoM increase compared to February, the magnitude of this recovery is expected to be more limited than pre-holiday forecasts suggested.

A fixed-price agreement has been reached with Glencore International AG for the sale of the existing ~5,100 dmt spodumene concentrate stockpile at the Finniss Lithium Project. The pricing achieved reflects a Fastmarkets SC6 CIF China equivalent price of US$2,023/dmt at the time of sale. This transaction will be effected through the existing Finniss logistics chain to Darwin Port, building important momentum ahead of a potential operational restart at the site. Concurrently, a ~75,000 dmt lithium fines stockpile remains available for sale. Funds from the Glencore agreement are expected to be received in the June quarter of 2026.