[SMM Analysis]Spent Cell Market Review (Aug 1-14): Price Divergence, Slow Trade on Policy

During the first half of August, the domestic spent battery cell market exhibited a pattern of price divergence and sluggish trading activity. Price trajectories varied across different battery chemistries: lithium iron phosphate (LFP) spent cells saw modest upward quotation adjustments, buoyed by a periodic rebound in lithium carbonate prices; ternary spent cells edged down slightly due to persistent declines in cobalt sulfate, though overall levels remained largely stable; while lithium cobalt oxide spent cells experienced a modest downward shift in their price center, weighed down by the weakening cobalt sulfate market.

On the recovery side, salt products continued to trade at discounts relative to primary materials. Actual transaction prices for cobalt sulfate remained around 5% below the lower end of SMM's published market quotations, whereas nickel sulfate prices held broadly steady.

Downstream hydrometallurgical refiners are currently caught in a double squeeze: rising sulfur prices have elevated production costs, while selling prices for recycled salts have failed to keep pace, thereby compressing profit margins. This has further diminished their acceptance of high-priced black mass, prompting more conservative procurement strategies focused primarily on digesting existing inventories, with bulk transactions remaining scarce.

On the policy front, the removal of the echelon-utilization white-list on July 30 effectively stripped tiered-use enterprises of state-level accreditation. As a result, spent cells previously channeled into echelon utilization are expected to increasingly shift toward the crushing and processing route. For crushing operators, this implies a gradual improvement in feedstock availability and a narrowing of procurement premiums. However, the transmission of this positive effect will take time.

One of the contributing factors to the current subdued trading environment is the tightening compliance oversight across the recycling industry following the white-list restructuring. Upstream battery manufacturers and traders are now re-evaluating the credibility and stability of downstream counterparties in light of changes in their qualification status, leading to a more cautious pace of shipments. Both buyers and sellers remain in a phase of policy digestion and strategic recalibration, which has collectively dampened overall market activity.

In summary, the near-term trends of price divergence and muted trading are likely to persist. Going forward, key factors to monitor include the price movements of lithium carbonate and cobalt/nickel salts, shifts in upstream shipment rhythms following industry rectification, and the actual pace of end-of-life battery cell releases from the terminal stage.