[SMM Cobalt-Lithium Morning Meeting Minutes] Battery material prices diverge; end-user purchases remain cautious

Lithium Ore:

The lithium ore market saw prices decline recently. Weighed down by falling lithium carbonate prices, lithium chemical plants showed reduced acceptance of high-priced ore, with purchases mainly driven by just-in-time restocking, and buyers’ desire to bargain down prices strengthened. However, mines and traders maintained a strong sentiment to hold prices firm and showed limited willingness to sell at low prices, leaving market transactions in a stalemate. On the supply side, attention should be paid to the license renewal and production resumption pace at lepidolite mines in Yichun, Q3 arrival of lithium concentrates from Australia and Zimbabwe, and the extent to which new mine production is realized. If imported ore arrivals are concentrated and domestic lepidolite supply gradually recovers, inventory pressure on the ore side could increase. However, considering high volumes locked in long-term contracts by major mines, limited available spot resources, and downstream EV and ESS production schedules remaining at high levels, lithium ore prices still find support and are expected to continue consolidating alongside lithium carbonate prices.

Lithium Carbonate:

At the start of this week, the SMM spot price for battery-grade lithium carbonate increased, consolidating from the previous trading day. On the futures side, the lithium carbonate 2609 contract opened higher today at 145,800 yuan/mt. Bulls moved quickly after the open, driving prices to a peak of 148,200 yuan/mt before encountering bearish pressure that sent them pulling back to consolidate. Prices fluctuated below the average price line of 146,000 yuan/mt during the morning session, touching a low of 143,300 yuan/mt. Around midday, bulls and bears tussled within the 143,300–146,000 yuan/mt range. In the afternoon, bulls re-entered, rapidly lifting prices above the average price line before consolidating higher. A late-session surge by bulls pushed the price to settle near 147,200 yuan/mt, ultimately closing up 2.39% at 147,200 yuan/mt, with open interest decreasing by 585 lots. In the spot market, downstream procurement remained mostly just-in-time, with transactions concentrated near the 145,000 yuan/mt level and limited acceptance of higher prices. Upstream lithium chemical plants maintained a firm stance on holding prices for spot orders, but, dragged down by downstream wait-and-see sentiment, buyers and sellers continued to wrestle. Overall, market inquiries and actual transactions remained stable.

Lithium Hydroxide:

At the start of the week, the domestic spot lithium hydroxide price range held steady at 129,000–139,500 yuan/mt, with an average price of 134,300 yuan/mt, marking a slight uptick from the previous trading day. In terms of quotes, listing prices from mainstream manufacturers mostly held firm above the 135,000 yuan/mt mark, while traders generally pegged their prices to the lithium carbonate 2609 futures contract, participating in the market via spot-futures price spread quotes. The discount on lithium hydroxide against the contract currently stands at a range of 13,000–18,000 yuan/mt, with traders showing relatively active willingness to sell.

On the demand side, performance remained lackluster, with limited growth in spot order inquiries. Additionally, as some downstream enterprises had already completed minor restocking operations earlier, their raw material procurement pace slowed further, and their purchasing stance became more cautious. Actual transactions were still concentrated on small rigid-demand orders, with an overall stable but sluggish market sentiment. Overall, for prices to achieve an effective and sustained upward breakout, clearer recovery signals from the cathode material and end-use consumption sectors are still needed, as near-term fundamentals lack strong drivers.

Refined Cobalt:

At the start of the week, spot refined cobalt prices continued to drift lower. Supply side, mainstream smelters lowered their ex-factory offers to 360,000 yuan/mt; after the rapid price decline, traders raised their spot-futures price spread premiums to a range of 1,000-10,000 yuan/mt. Demand side, downstream enterprises were in the summer break cycle, with low purchase willingness, maintaining only a small amount of rigid-demand restocking. Overall, July-August is the traditional consumption off-season for refined cobalt, with limited demand support, and the short-term price is likely to continue in the doldrums.

Intermediate Products:

At the start of the week, prices of cobalt intermediate products were largely stable, and the market tug-of-war remained intense. Supply side, some Chinese-funded miners continued to base their offers on the European standard refined cobalt low-end price multiplied by the cobalt hydroxide payables coefficient. However, due to significant divergence in psychological expectations regarding the coefficient between upstream and downstream, actual transactions struggled to advance. Demand side, affected by weaker cobalt salt and refined cobalt prices, downstream smelters' psychological price levels for raw materials had further retreated to around $20-21/lb. In the short term, miners' willingness to hold prices firm remains, but downstream demand support is insufficient, and the tug-of-war persists.

Cobalt Salt (Cobalt Sulphate and Cobalt Chloride):

At the start of the week, the cobalt sulphate market trading atmosphere remained sluggish. Supply side, primary smelters' offers held at high levels, with mainstream enterprises continuing to hold firm in the range of 80,000-85,000 yuan/mt; recycling smelters had relatively stronger willingness to sell, with some having lowered their offers to below 78,000 yuan/mt. Demand side, there was no notable improvement. Top-tier players' raw material inventories were still ample, and they had not yet released a new round of purchase demand. Some small and medium-sized enterprises had rigid restocking needs, but affected by the sharp decline in refined cobalt prices, they adopted a cautious purchasing stance, with target prices mostly anchored near the 73,000-74,000 yuan/mt cost of refined cobalt reverse dissolution, and the gap with sellers' offers remained large, resulting in limited actual transactions. In the short term, cobalt sulphate prices are expected to consolidate on a subdued note, and the sustained recovery of the market still awaits the realization of concentrated downstream restocking demand.

On Monday, the cobalt chloride market remained sluggish, with no notable increase in inquiry activity, and order signing remained sparse. Supply side, smelters' offers remained mostly stable, but the current offers reflected more of the upstream's intention to hold prices firm, making it very difficult to actually close deals at the quoted prices. Demand side, the "rush to buy amid continuous price rise and hold back amid price downturn" logic continued to dominate, with market participants cautious in their entry decisions, strong wait-and-see sentiment prevailing, and downstream currently holding relatively ample inventory, so the urgency to buy was not high. In the short term, prices are likely to continue moving sideways.

Cobalt Salt (Co3O4):

On Monday, the Co3O4 market remained sluggish, with actual transactions still very limited.Nickel Sulphate:

On July 27, the SMM battery-grade nickel sulphate average price edged up.

Cost side, affected by news of export obstacles for some Indonesian nickel products, nickel prices consolidated today, and the near-term spot cost of nickel sulphate production recently rebounded. Supply side, the tight supply pattern of intermediate products remained unchanged, MHP payables and auxiliary material prices such as sulphuric acid stayed high, some salt smelters had expectations for production cuts, and facing the nickel price rebound, some enterprises intended to hold prices firm. Demand side, as nickel prices dropped significantly MoM and some downstream enterprises accumulated certain inventories, downstream stocking sentiment was weak, and their acceptance of nickel salt prices was relatively low.

Today, the Willingness to Sell Sentiment Factor of upstream nickel salt smelters was 1.8, the Procurement Sentiment Factor of downstream precursor plants was 2.6, and the Sentiment Factor of integrated enterprises was 2.5 (historical data can be accessed in the database). Looking ahead, as the month-end procurement period approaches, the market is expected to gradually recover vitality, and nickel sulphate prices may rebound.

Ternary Cathode Precursor:

At the beginning of the week, ternary cathode precursor prices held steady; today, nickel sulphate prices edged up, cobalt sulphate prices held steady, and manganese sulphate prices were stable.

Discount side, for August and Q3 orders, due to high sulphate salt raw material costs, some producers were willing to raise discounts. Long-term contracts side, some producers had agreed on long-term contracts at the beginning of the year, and the payables have not been raised yet; for quarterly contracts, downstream buyers also showed weak acceptance of a payables increase, with the overall level holding steady compared to Q2. Spot orders side, as nickel and cobalt salt prices performed relatively weak recently, the payables for August orders are expected to hold steady overall compared to July.

Production side, export orders of top-tier producers remained strong this month, with production schedules at relatively high levels, and domestic producers' operating rates also recovered slightly compared to June.

Looking ahead, sulphate prices have generally pulled back recently, and new order pricing will need to track the pace of downstream stockpiling in Q3.

Ternary Cathode Materials:

At the start of this week, ternary cathode material prices rebounded slightly. On the raw material side, nickel sulphate prices rebounded slightly, cobalt sulphate and manganese sulphate prices remained stable, and lithium carbonate and lithium hydroxide prices rebounded slightly but continued to consolidate at lows. In terms of transaction sentiment, some battery cell manufacturers remained bearish. With relatively ample inventory, battery cell manufacturers generally adopted a cautious, wait-and-see approach, slowing down their cargo pick-up pace. Regarding discounts, battery cell manufacturers showed limited willingness to accept discount increases, as demand has not seen further growth. Meanwhile, with lithium battery consumption tax about to be reinstated, battery cell manufacturers may pass some cost pressure upstream, further complicating efforts to raise discounts. On the demand side, ternary battery cell manufacturers in the EV market generally settle prices using the M-1 month formula. Affected by the sharp decline in raw material prices in July, battery cell manufacturers exhibited strong wait-and-see sentiment, and actual pickup volumes this month are expected to fall short of earlier expectations. As a result, China’s ternary cathode material shipments in July could face downward pressure. In the consumer market, similarly impacted by declining raw material prices, the expected consumption tax restoration had only a limited effect in pulling orders forward.

LFP:

This week, LFP prices fell by approximately 1,650 yuan/mt, dragged down by a sharp decline in lithium carbonate prices. SMM’s lithium carbonate price dropped cumulatively by about 5,500 yuan/mt this week. Regarding processing fees, the price increase notices previously issued by top-tier cathode producers have yet to take effect. Currently, mainstream battery cell manufacturers and cathode suppliers coexist with three settlement models: linkage to iron phosphate/phosphoric acid prices, fixed prices, and blended contracts. Whether fixed-price processing fees for H2 will be adjusted remains to be confirmed. Among these, top-tier battery cell manufacturers only apply price linkage to their core, dependent cathode suppliers, while the rest mostly settle at fixed prices on a quarterly or semi-annual basis. Mid-to-small battery cell manufacturers generally adopt the price linkage model. In terms of production, industry-wide shipments rose approximately 7% MoM in July, meeting previous expectations, driven by steady growth in energy storage and actual demand boosts from commercial heavy-duty trucks. For August, shipments are expected to increase by 4-5% MoM, mainly due to new capacity coming online but still in the commissioning phase, limiting effective release. September will see a concentrated capacity ramp-up, coupled with gradually climbing demand from passenger and commercial vehicles, potentially shaping the “September-October peak season” dynamic. However, the specific scale of growth will require confirmation from the final survey at the end of July. Currently, the overall operating rate at LFP plants is near 80%, but divergence among enterprises is evident. Top-tier players’ high-quality supply remains sought-after, while mid-to-small players face insufficient orders due to technical constraints and have yet to run their production lines at full capacity.

Iron Phosphate:

SMM iron phosphate prices remained unchanged this week. Upstream and downstream enterprises are about to begin a new round of negotiations. The desired transaction prices of upstream iron phosphate producers were all 200-300 yuan/mt higher than last month, while the intended purchase prices of downstream LFP enterprises declined somewhat, mainly due to falling raw material prices. On the raw material side, phosphoric acid prices edged down in July. Affected by a slight correction in sulphur prices and still-low prices for thermal-process acid, phosphoric acid transaction prices were approximately 9,500-10,100 yuan this month. Ferrous sulphate market prices remained around 800 yuan/mt. Monoammonium phosphate (MAP) prices were stable. Although upstream producers intended to raise prices, price increases were hard to achieve due to price controls and low purchase willingness from downstream iron phosphate enterprises; the market price was approximately 7,500 yuan/mt. On the production side, iron phosphate enterprises generally maintained stable production this week, but overall growth in July was limited due to capacity constraints. On the downstream demand side, LFP demand continued to improve, with an overall MoM increase of 7% expected.

LCO:

The LCO market extended the previous stable but sluggish trend on Monday. Co3O4 was relatively steady overall; however, lithium carbonate experienced a significant decline this week, causing LCO prices to drop to a certain extent. On the supply side, there was no clear improvement in production schedules and shipments, with the short-term outlook for the market remaining relatively pessimistic. On the demand side, highlights were still lacking. Orders from downstream battery cell makers and end-users improved slightly, but constrained by the rising ternary proportion in consumer products, this minor improvement did not translate to the LCO market. Currently, both supply and demand sides are still waiting for clearer signals. Close attention needs to be paid to upstream raw material price changes and whether downstream restocking can substantively commence.

Anode:

This week, the artificial graphite market operated steadily. Supply side, leading anode enterprises' self-integrated capacity struggled to match the continuous increase in downstream orders, and the tight supply of spot cargo showed no sign of easing. Meanwhile, raw material prices rose consecutively, and coupled with cost pressures not yet fully digested, cost support remained firm. However, due to a certain lag in production, the cost pressure from rising material prices during this period did not manifest in anode prices in the near term. For natural graphite, end-use purchase demand remained sluggish, and downstream push for lower prices was widespread. Nevertheless, with prices hovering near the cost line for an extended period, the tug-of-war between sellers and buyers was clearly stalemated.

Looking ahead, with improving downstream demand and tight effective supply, combined with cost pressure gradually transmitting downstream, artificial graphite prices are expected to climb steadily. In contrast, natural graphite will likely continue to move sideways in the short term due to a lack of effective demand-side drivers, lacking momentum for a trend-breaking breakthrough.

Separator:

The separator market was overall stable this week. From specific quotations, high-end wet-process separator prices were firm: 5μm (5μ+2μ) quoted at 1.57-1.87 yuan/m², mainstream quotations for 7μm (7μ+2μ) were 1.14-1.337 yuan/m², and 9μm (9μ+3μ) quoted at 1.135-1.29 yuan/m². Supply side, new capacity additions in July were mainly driven by the renovation and ramping up of individual lines, with a slow growth pace. Top-tier players maintained full production, while second- and third-tier enterprises kept operating rates at medium-high levels. Demand side, downstream EV and ESS production schedules stayed high, with battery cell enterprises primarily making just-in-time procurement and showing average stockpiling willingness. The current supply-demand balance is tight, but momentum for further price increases was insufficient, with a growing atmosphere of tug-of-war between upstream and downstream. Base film, suppressed by competitive pricing from second- and third-tier enterprises, saw limited price increases; coated products saw relatively firm prices due to tight supply-demand. In the short term, after previous price adjustments take effect, the market is entering a price digestion period, and separator prices are expected to remain mainly stable. Attention should be paid to price changes after the start of a new round of order negotiations in September.

Electrolyte:

Electrolyte market prices were temporarily stable this week. Cost side, spot lithium carbonate prices continued their downward trend this week. However, on one hand, lithium fluoride producers showed strong willingness to hold prices firm, adopted a conservative shipment stance, and their quotation declines were relatively limited. For enterprises purchasing lithium fluoride externally to produce LiPF6, the room for raw material cost decline was relatively small. On the other hand, influenced by market news and supported by subsequent demand, electrolyte enterprises' purchase willingness increased recently. Combined with LiPF6 producers' already low inventory levels, this enabled market prices to edge up slightly. The additive sector sentiment was relatively strong, with downstream demand continuing to grow. However, individual VC producers conducted equipment maintenance and experienced temporary shutdowns, leading to a phased contraction in industry effective supply. The supply-demand tightness intensified further, pushing spot VC prices higher again. Nevertheless, there is a time lag in the transmission of raw material costs to end-use electrolyte, so recent electrolyte prices were temporarily stable. Supply and demand side, although the industry is in the traditional off-season, power battery enterprises managed both end-use demand and preparation for the Q3 peak season; overall production schedules still rose. ESS demand prosperity remained high, with ESS battery cell production continually growing, forming stable just-in-time demand support. Electrolyte enterprises generally adopted a produce-based-on-sales model, and industry production rose synchronously. Overall, electrolyte price trends have a strong correlation with raw material costs. At the current stage, cost pressure from rising prices of core raw materials like VC will gradually transmit downstream, and there are expectations for subsequent upward adjustments in electrolyte prices.

Sodium-Ion Battery:

This week, sodium-ion battery NFPP cathode production continued at full capacity, with output shipped immediately and inventory maintained at an extremely low safety margin of only 100 tons, leaving supply elasticity extremely limited. The industry saw simultaneous layout of both NFPP and NFS routes, though NFS still awaits market validation. 2026 is seen as the first year of true marketization for cathode materials. The period from July saw the sector enter a rapid volume ramp-up stage, and expectations for Q4 supply-demand tightness were further reinforced. Hard carbon anode capacity bottlenecks remained prominent. Some enterprises dared not accept large orders due to capacity constraints. The debugging cycle is expected to be shorter than anticipated, but still unable to fill the gap in the short term. The toll processing model is limited by significant variations in technical parameters between enterprises and high quality control difficulty, unable to scale up quickly in the short term, leading to significant price stratification. Demand side, average daily shipments to key clients remain stable; the current core application scenarios are 2/3-wheelers and start-stop products, gradually expanding to AIDC, UPS, and electric motorcycle sectors.

Recycling:

On the raw material side, lithium carbonate and nickel sulphate prices fluctuated this week, while cobalt sulphate prices fell steadily. This week, based on ternary/LCO and LFP material types, for LFP wet-process: taking LFP electrode black mass as an example, the current LFP electrode black mass price was 6,350-6,800 yuan/mtu, with prices continuously falling MoM from last Thursday's transaction levels. The main reason was the sustained decline in lithium carbonate from Monday to Wednesday, which further drove a slight decrease in LFP black mass prices. Meanwhile, the current LFP battery black mass price was 5,650-6,000 yuan/mtu, and the price spread with electrode black mass gradually widened. The main reason was that several LFP restoration enterprises were actively operating, primarily purchasing LFP electrodes, which expanded the demand market for end-of-life LFP electrodes. Consequently, some LFP wet-process enterprises switched to purchasing LFP battery black mass or bought LFP electrode black mass at higher additional prices. For ternary and LCO: the nickel and cobalt payables for ternary electrode black mass were approximately 76-78%, with low-priced deals beginning to appear in the market, and the low-end payables in the range declined. The cobalt and lithium payables for pure cobalt and high-cobalt scrap coefficients also continued to fall. On Monday, refined cobalt prices fell steadily, and cobalt sulphate prices also fell steadily. Coupled with sluggish end-use consumer market demand, upstream wet-process enterprises made sluggish purchases.

Downstream and End-User:

This week, prices of DC-side battery cabins remained generally stable both in and outside China. On July 22, the Xixin Energy Storage (Xinxiang) Co., Ltd. 200MW/400MWh standalone ESS demonstration project announced bid winners. The first candidate was PowerChina Guizhou Engineering Co., Ltd., with a bid price of 371.1766 million yuan, equivalent to 0.9279 yuan/Wh; the second candidate was Sinohydro Engineering Bureau 4 Co., Ltd., with a bid price of 362.70 million yuan, equivalent to 0.9068 yuan/Wh; the third candidate was PowerChina Hebei Engineering Co., Ltd., with a bid price of 379.99 million yuan, equivalent to 0.95 yuan/Wh.

News:    

[Shengquan Group: Advanced electronic materials saw full production and sales, and silicon carbon anode has achieved mass production.] Shengquan Group stated on an interactive platform that its high-end electronic-grade PPO, specialty epoxy, encapsulation resins, and other advanced electronic materials have basically achieved full production and sales. Current existing capacity is basically fully utilized. Long-term stable cooperation has been established with top-tier CCL and packaging/test manufacturers. The company has planned a 2,000 mt/year PPO/OPE resin co-production project, a 1,000 mt/year high-end hydrocarbon resin expansion project, and an 11,000 mt/year electronic-grade specialty epoxy resin for chip packaging expansion project. The company's porous carbon matched with silicon carbon anode has achieved mass production, and its products have entered top-tier consumer electronics battery cell enterprises, with power battery clients advancing verification simultaneously. The kiloton-level silicon carbon production line will be put into production this year. Hard carbon anode production lines with 10kt-level capacity have been completed, and two types of products—biomass-based and resin-based—have successfully passed certification by top-tier battery cell enterprises and are being supplied in batches to the ESS and two-wheeler sodium-ion battery markets. (Jinshi Data APP)

[CATL: 587Ah large ESS battery cells have achieved mass delivery.] CATL released an investor relations activity record announcement stating that the company's combined EV and ESS battery sales in H1 increased about 60% YoY, with ESS battery sales accounting for approximately 1/4. The ESS market will maintain relatively rapid growth this year and next. In H1, the capacity utilization rate was basically saturated, and the company has already stockpiled for customer demand and advanced capacity construction. Domestic ESS sales accounted for a slightly higher proportion than overseas, and the proportion of ESS systems approached 70%. 587Ah large ESS battery cells have achieved mass delivery. The company is optimistic about the prospects of the AIDC business and can provide a full suite of innovative energy solutions. (Jinshi Data APP)

[CPCA Secretary General Cui Dongshu: Auto industry profit margin was 3.8% in H1 2026] CPCA Secretary General Cui Dongshu wrote that auto industry revenue was 5,189.3 billion yuan in H1 2026, up 1.8% YoY; costs were 4,610 billion yuan, up 2.8%; profit was 195.4 billion yuan, down 20% YoY. The auto industry's profit margin was 3.8%, which remains low relative to the 6.5% average profit margin of downstream industrial enterprises. In 2026, various regions vigorously promoted the implementation of the program of large-scale equipment upgrades and consumer goods trade-ins, gradually effectively unleashing domestic demand vitality. However, the improvement in the auto industry's efficiency significantly lags behind other consumer goods. As the national anti-involution work continues to advance, the auto industry is severely squeezed by upstream factors, with prominent pricing issues. Oil prices surged, and non-ferrous metal and semiconductor profits soared. End-user car purchase wait-and-see sentiment was strong. Operational pressure on automakers continued to intensify, and high-quality development was severely impacted by upstream factors. (Cui Dongshu) (Jinshi Data APP)

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Lin Ziya 86-2151666902

Feng Disheng 021-51666714

Lyu Yanlin 021-20707875

Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

Wang Jie 021-51595902

Zhang Haohan 021-51666752

Chen Bolin 021-51666836

Xu Mengqi 021-20707868