[SMM Cobalt & Lithium Morning Meeting Minutes] Lithium Chemicals Remained Relatively Strong as Industry Chain Divergence Intensified; Peak-Season Demand Support Gradually Strengthened

Lithium Ore:

This week, lithium ore prices held up well overall, and the upward shift in the price center of lithium carbonate continued to transmit to the ore side, but as ore prices followed the rise, the market’s key tension gradually shifted from the earlier “tight spot availability” to “salt plants’ ability to absorb high-priced raw materials.” Supply side, overseas mines maintained relatively high production and shipment levels overall, but there remained a time lag between new supply being shipped and becoming tradable spot cargo in China, so circulating supply was still relatively limited in the short term; meanwhile, against a backdrop of firm lithium prices, mines and traders saw improved expectations for the market outlook, and their willingness to sell at low prices declined further, tightening the actually tradable resources in the spot market. Demand side, salt plants’ current production levels remained high, and rigid restocking demand for raw materials provided support for ore prices; however, after spodumene prices continued to rise in tandem with lithium carbonate, smelting profits for externally purchased ore were squeezed again, and some salt plants became more cautious in purchasing high-priced ore. Therefore, current ore prices were not driven purely by a supply gap, but rather reflected a pricing tug-of-war shaped more by short-term spot tightness, the ore side holding prices firm, and salt plants’ rigid procurement. Lithium ore prices were expected to retain some support in the short term, but further upside would depend more on whether lithium carbonate prices could continue to rise; if lithium chemicals prices shifted into consolidation while overseas shipments and arrivals increased gradually, profit constraints at salt plants could again become the core factor limiting ore price gains.

Lithium Carbonate:

At the beginning of this week, SMM’s spot price for battery-grade lithium carbonate drifted higher compared with the previous working day. The most-traded lithium carbonate contract rolled from 2609 to 2701. Today it opened higher at 155,600 yuan/mt; after the open, bullish funds quickly pushed prices up, with the price shooting up to 157,500 yuan/mt to set an intraday high, before immediately facing selling pressure from bears and pulling back amid consolidation. In the morning session, it fluctuated around the 154,000–155,500 yuan/mt range, with the center gradually moving lower; around midday, bears stepped up in a concentrated manner, accelerating the decline to 151,800 yuan/mt; in the afternoon, it consolidated at lows—although there was a slight rebound during the session, it failed to break above resistance from the average price line. Late in the session, it moved sideways in the 153,300–153,500 yuan/mt range, and ultimately closed down 0.44% at 153,500 yuan/mt, with open interest increasing by 18,658 lots. In the spot market, downstream material plants purchased as needed on dips, but as prices continued to drift lower amid consolidation, wait-and-see sentiment remained strong; large-scale restocking had yet to emerge, and overall activity was still dominated by just-in-time procurement. Supply side, upstream lithium chemical plants’ sentiment to hold prices firm continued, and the quoted levels for some spot orders were notably higher than actual market transaction levels; however, a small number of lithium chemical plants maintained a normal pace of spot-order shipments. Overall, both market inquiry activity and actual transaction volumes recovered.

Lithium Hydroxide:

At the beginning of the week, the spot lithium hydroxide price rose by 1,500 yuan/mt MoM, with the price center moving up to 135,000-147,000 yuan/mt. Upstream lithium chemical plants showed a clear sentiment to follow the rise in quotations, generally raising offers to above 140,000 yuan/mt. The discount room for fixed-price offers narrowed, and producers’ willingness to hold back from selling and hold prices firm showed no sign of easing. Although downstream players passively raised their psychological price level to above 135,000 yuan/mt, their earlier restocking via short-term orders had largely been completed. Current inquiry and deal-making sentiment turned more cautious, with limited follow-through on firm orders. In the trading segment, the discount narrowed compared with the previous period, while transactions remained sluggish. Overall, this round of price rise was still mainly driven by a repair in expectations, and its sustainability still needs further verification from the demand side.

Refined Cobalt:

On Monday this week, refined cobalt prices continued to consolidate on a subdued note. Supply side, mainstream smelters kept ex-works quotations at 335,000 yuan/mt. Small and mid-sized smelters kept the spot-futures price spread in the range of a 6,000 yuan/mt discount to a 4,000 yuan/mt premium, while traders’ mainstream quotations kept the spot-futures price spread at parity to a 10,000 yuan/mt premium. Demand side, downstream enterprises remained in the summer break cycle, maintaining only small-volume restocking for rigid demand, and the trading atmosphere was sluggish. No clear new drivers emerged in the market; supply and demand fundamentals changed relatively little, and prices continued to consolidate at lows. Overall, consumption remained in the off-season, with limited demand support. Prices may continue to consolidate on a subdued note in the short term, and attention should be paid to changes in downstream restocking pace after the summer break ends.

Intermediate Products:

On Monday this week, the cobalt intermediate products market remained in a stalemate, and actual transactions were still in a vacuum. Recently, some miners initiated tenders, with indicative prices around $21-22/lb. However, against the backdrop of continued weakness in cobalt sulphate and refined cobalt, downstream players and traders’ psychological price level had pulled back to around $17-19/lb. The price spread between buyers and sellers was wide, and tenders continued to fail. Facing the prolonged stalemate, some miners began considering a strategy shift: suspending direct sales of intermediate products and instead seeking toll manufacturers to process them into refined cobalt for sale, in order to avoid the loss risk brought by direct sales at current low prices. In the short term, although miners had the willingness to hold prices firm, they lacked cooperation from actual downstream procurement. The market remained in a deadlock, and price stabilization still depends on the materialization of actual deals.

Cobalt Salt (Cobalt Sulphate and Cobalt Chloride):

On Monday this week, the cobalt sulphate market continued on a subdued trend. Buyers and sellers’ psychological price levels continued to diverge, making it difficult for transactions to scale up. Supply-side quotations diverged significantly: primary smelters had not yet fully digested earlier high-priced raw material, and quotations still held around 80,000 yuan/mt. However, MHP cobalt payables fell to around a 73% discount, and spot costs had pulled back to 70,000 yuan/mt, meaning cost support had in fact loosened. Recyclers showed strong willingness to sell, with mainstream quotations around a 93-95% discount to the SMM low-end price. Some enterprises under financial constraints continued to push prices lower in exchange for liquidity, and low-priced resources in the market moved down to 79,000-70,000 yuan/mt. Some extreme low prices were heard at 66,000-67,000 yuan/mt, though these were still mainly sporadic spot orders. Demand side, performance remained weak. Downstream enterprises saw a slow recovery in orders, and procurement only met rigid demand. Some inquiry intentions had been pushed down to 65,000 yuan/mt, but the price spread between buyers and sellers was wide, resulting in limited actual deals. In the short term, the cobalt sulphate market has yet to show clear signs of stopping falling, and price stabilization still depends on a concentrated release of downstream restocking demand.

This Monday, China’s cobalt chloride market showed no significant change in reported prices.Last week’s sharp price decline was not driven by a sudden deterioration in supply and demand fundamentals in the short term, but rather reflected a rational return of previously inflated offers to the market’s real transaction prices. Specifically, although sellers’ earlier offers were somewhat inflated, they lacked support from real liquidity. When buyers with actual procurement demand quoted prices below the current spot cobalt chloride offers, or even below cost, sellers holding pessimistic expectations—out of concern over further declines and for turnover considerations—proactively abandoned their original cost floor. This facilitated some firm deals at the cost line or even below it, effectively squeezing out the previously inflated premium. Of course, current low prices only reflect the stance of some enterprises, and not all enterprises have begun to cut offers sharply. Looking ahead, we believe the likelihood of another sharp drop in cobalt chloride prices in the short term is relatively low. Based on the above logic, the center in the short term has basically completed its shift from “inflated offers” toward “actual costs,” and the market will subsequently enter a hit-bottom phase.

Cobalt salt (Co3O4):

This Monday, Co3O4 prices held steady. Our actual offer cuts last week were larger than the market’s decline, mainly due to a proactive adjustment of the pricing system and a catch-up drop.This downtrend has continued from late May to the present. Earlier, upstream and downstream participants, based on weak expectations of stabilization, hoped we would “decline slowly” to cushion the impact of a sharp price drop on the market, so we often chose smaller offer adjustments to represent market prices. However, as the downcycle has extended to nearly three months, the cushioning effect of our slow decline on market pessimism has gradually weakened, and the price spread between current firm transaction prices and our earlier offers has widened. To align with actual deals, we proactively abandoned the previous slow-decline pace this week and moved our offers closer to the market’s real tradable range, resulting in a decline significantly larger than the market average. In the short term, the direction of Co3O4 prices will remain closely anchored to changes in cobalt chloride prices.

Nickel sulphate:

On August 17, the average price of SMM battery-grade nickel sulphate held steady.

Cost side, a recovery in macro sentiment drove a broad rise in base metals, and the spot production cost of nickel sulphate rebounded slightly; supply side, as costs remain high, some producers were willing to hold prices firm, while some producers also had relatively high inventory levels and sought shipments and destocking; demand side, recently some downstream enterprises have mainly relied on long-term contract supply, with weak sentiment for spot orders to build inventory and relatively low acceptance of nickel salt prices. Today, the Willingness to Sell Sentiment Factor was 2 for upstream nickel salt smelters, 2.3 for downstream precursor plants’ purchasing sentiment factor, and 2.3 for integrated enterprises’ sentiment factor (historical data are available in the database).

Looking ahead, spot market activity was weak in the short term, and nickel sulphate prices were under pressure overall.

Ternary cathode precursor:

At the beginning of the week, ternary cathode precursor prices weakened. Today, nickel sulphate prices held steady, cobalt sulphate prices declined, and manganese sulphate prices held steady.

On discounts, for August and Q3 orders, as sulphate raw material costs were relatively high earlier, some producers showed a greater willingness to increase discounts. For long-term contracts, annual agreements for some producers had already been settled at the beginning of the year; for most producers, coefficients had not been raised yet. Downstream acceptance of coefficient increases for quarterly contracts was also weak. Except for some top-tier producers with certain bargaining power, most producers remained broadly stable versus Q2. For spot orders, as nickel and cobalt salt prices had been relatively weak recently, some downstream enterprises sought toll processing of raw materials or self-production, and coefficients for August orders were expected to weaken somewhat.

On production, export orders for top-tier producers continued to perform well this month, with production schedules at a relatively high level. Production utilization at China’s top-tier producers also rebounded notably, but some small and mid-sized producers still maintained relatively low production schedules due to the off-season.

Looking ahead, sulphate prices had not shown a clear rebound yet, and pricing for subsequent new orders will need to track actual downstream demand during the peak season.

Ternary cathode material:

At the beginning of this week, ternary cathode material prices continued to rebound.Raw material side, nickel sulphate and manganese sulphate temporarily held steady, cobalt sulphate prices entered a phase of rapid decline, while lithium carbonate and lithium hydroxide prices continued to rebound, driving ternary cathode material prices higher. In terms of transaction sentiment, cathode plants were largely in a wait-and-see mode, with weak purchase willingness for now. On discounts, there were no adjustments to nickel, cobalt, and lithium discounts recently. On demand, August orders increased steadily. Stockpiling for new car models ahead of the traditional September-October peak season boosted domestic cathode order demand; outside China, especially in Europe, auto sales remained strong, continuing to boost ternary demand. On the consumer market, supply was basically stabilized via long-term contracts, spot order transactions were relatively sluggish, and demand still showed no clear signs of recovery.

LFP:

This week, China’s LFP market held up well overall.On prices, driven by fluctuations in upstream lithium chemicals prices and raised processing fees, LFP processing fees increased day by day. Cathode plants were still actively negotiating price increases with battery cell manufacturers, and cost pass-through continued to advance. On supply and demand, downstream demand remained robust; August–September battery cell production schedules had already exceeded LFP production schedules, and the industry showed a tight balance with demand exceeding supply. The current core contradiction lay in constrained raw material supply rather than insufficient capacity. In September, non-integrated LFP producers generally faced difficulties in procuring iron phosphate, and iron phosphate supply was also relatively tight, with producers prioritising deliveries to higher-bidding clients. Days of inventories in the cathode material industry had fallen from 10–11 days to 7–8 days, with a notable pace of destocking. In terms of enterprise developments, top-tier players had largely abandoned low value-added first-calcination materials and fully shifted to high-compaction second-calcination products. New capacity additions were mainly 3.5th- to 4th-generation materials, benefiting from the accelerated ramp-up of production for large battery cells used in commercial vehicles and energy storage. Cathode suppliers’ bargaining power gradually strengthened: they allocated more incremental capacity to battery cell manufacturers willing to accept price increases, while only maintaining basic supply for clients that continued to push processing fees lower. As a result, some battery cell manufacturers that did not raise prices “could not secure materials.” Looking ahead, the pattern of demand being stronger than supply was expected to persist in the short term. It was recommended to monitor the ramp-up progress of new production lines at top-tier players, iron phosphate price trends, and the progress of price-increase negotiations by battery cell manufacturers.

Iron phosphate:

This week, SMM iron phosphate prices temporarily held steady, and upstream and downstream enterprises largely concluded negotiations, with prices only set to rise further ; on the raw material side, phosphoric acid prices edged down this week, with transaction prices at around 8,500-9,500 yuan/mt. Ferrous sulphate market prices still held at around 800 yuan/mt, while monoammonium phosphate (MAP) prices remained firm at around 7,500 yuan/mt, with overall prices clearly lower than several months ago. This month, end-use demand continued to increase. Affected by relatively tight supply, downstream enterprises were at a slight disadvantage in negotiations, and declines in raw material prices still struggled to curb upstream producers’ willingness to keep raising prices. On the production side, iron phosphate enterprises were proactive in production this month, but constrained by production lines and tight capacity, overall growth in August was limited. On downstream demand, LFP demand continued to improve, and overall demand was expected to increase MoM by 5%.

LCO:

On Monday this week, the LCO market remained relatively mediocre, with no major fluctuations. Supply side, downstream demand recovered slowly, and production and shipments across enterprises had remained at relatively low levels since the beginning of the year. Price-cutting strategies adopted to compete for market share had significantly narrowed profit margins, but actual shipments did not improve accordingly. Demand side, while battery cell manufacturers’ production schedules edged up, the incremental growth was not smoothly transmitted to the LCO segment, and a rising share of downstream switching to ternary cathode material was also one of the key factors.

Anode:

This week, in China, artificial graphite anode material prices held steady. From the supply and demand fundamentals, the market continued the earlier relatively tight supply-demand pattern, with no significant structural loosening or further tightening for the time being, remaining overall in a tight balance. Raw material coke prices stayed stable this week, but due to production lag effects, the cost pressure brought by earlier raw material price increases was gradually being released this month, and the support to the cost side of anode material remained strong. Against this backdrop, anode enterprises showed a relatively strong willingness to push prices higher. However, after completing a round of slight price increases in early this month, prices had now entered a phase of steady digestion, and the momentum for another near-term adjustment weakened somewhat. For natural graphite, although end-use demand remained weak, prices had long moved sideways near the cost line. The tug-of-war between sellers and buyers entered a stalemate, and downside room was also limited.

Looking ahead, supported by continuously improving demand expectations and a tightening supply pattern, artificial graphite prices still had room for further increases; natural graphite, constrained by insufficient end-use demand momentum, was expected to consolidate on a weak note in the short term, and a breakout would still require new catalysts.

Separator:

This week, separator prices continued to move sideways, with quotation ranges for products of various specifications basically unchanged from last week. In terms of specific quotations, mid- to high-end wet-process separator prices remained firm: 5 μm (5 μm + 2 μm) at 1.57-1.87 yuan/m², 7 μm (7 μm + 2 μm) mainstream quotations at 1.14-1.337 yuan/m², and 9 μm (9 μm + 3 μm) at 1.135-1.29 yuan/m². This round of price stagnation was more a pause in pace rather than a change in direction. Downstream, after multiple rounds of price adjustments earlier, battery cell enterprises were currently more inclined to digest existing inventory, with low acceptance of price increases for new separator orders. Upstream, although separator enterprises faced ongoing order pressure, considering that downstream profit margins had already been compressed, they also lacked the momentum to force through price hikes in the short term, leaving both sides in a phase of mutual probing. Going forward, September’s quarterly order negotiations would be the key period to break the current balance. With the peak demand season overlapping with the continued existence of a supply-demand gap, separator enterprises would have stronger conditions to raise prices then, but the actual magnitude would depend on downstream acceptance. In the short term, the price stalemate was expected to persist for some time

Electrolyte

This week, electrolyte market prices temporarily held steady. Cost side, LiPF6 prices remained stable this week. On the one hand, lithium carbonate futures fluctuated within a limited range, resulting in relatively small cost fluctuations; on the other hand, the market’s concentrated order-signing phase ended and trading sentiment cooled, allowing LiPF6 prices to stabilise in the short term. In the additive segment, VC orders were basically finalised this month and were currently in the delivery cycle. Coupled with tight supply, most producers temporarily did not quote prices. If there was still no clear and effective supply growth in the short term, the tight supply-demand pattern, supported by demand, was expected to further intensify, with strong momentum for subsequent price increases. With upstream raw materials temporarily stable, electrolyte market prices also temporarily held steady. On supply and demand, downstream power battery enterprises were actively stockpiling for the traditional September-October peak season, while strong demand in the energy storage market continued. Together, these drove a steady rise in battery cell operating rates and output levels. Transmitted to the electrolyte side, producers generally adopted a produce based on sales model, and as downstream orders increased, the industry operating rate also rose accordingly. Overall, subsequent electrolyte price trends still required continued tracking of raw material price fluctuations and their transmission.

Sodium-ion battery:

On the cathode material side, NFPP operated at full capacity and demand growth was evident, but in Q3 there were still few enterprises with scaled shipments, and the relatively tight supply pattern was expected to continue into early Q4 ; on the hard carbon anode side, delivery pressure became prominent under low inventory operations. Toll processing could serve as a short-term stopgap, but quality control and cost issues were difficult to avoid, and the tight supply pattern for high-end products was hard to resolve in the short term; on the electrolyte side, top-tier players’ capacity was nearing saturation, driving order spillover, but with few market participants and insufficient entry by lithium battery enterprises, limited supply elasticity remained the core bottleneck; insufficient commissioning of new battery cell production lines and an incomplete supply system delayed volume ramp-up. Toll processing was common, but the hidden risk of double-counting production was worth noting.

Recycling:

On the raw material side, cobalt sulphate and nickel sulphate prices fluctuated this week, and lithium carbonate prices also fluctuated. This week, by ternary, LCO, and LFP material types, on the LFP hydrometallurgy side: taking LFP electrode black mass as an example, at this stage, LFP electrode black mass prices were 6,450-6,900 yuan per % lithium, and transaction prices continued to rise from last Thursday on a WoW basis. Meanwhile, LFP battery black mass prices were 5,600-6,050 yuan per % lithium, and the price spread versus electrode black mass gradually widened. The main reason was that multiple LFP repair enterprises were active in production, and they mainly purchased LFP electrodes, expanding the demand market for used LFP electrodes. Therefore, some LFP hydrometallurgy enterprises switched to purchasing LFP battery black mass, or additionally purchased LFP electrode black mass at higher prices. On the ternary and LCO side, ternary electrode black mass nickel and cobalt payables were around 76-78%, and transactions for some high-nickel categories such as 8- and 9-series ternary electrode black mass were still around 79%; LCO electrode black mass cobalt payables were 75-77%, and LCO electrode black mass lithium payables were 73-75%. At present, as secondary cobalt sulphate prices continued to edge down, downstream LCO hydrometallurgy enterprises purchased very cautiously, market transactions were sluggish, and payables for pure-cobalt and high-cobalt black mass continued to be priced with cobalt and lithium calculated separately, with current prices slightly lower than on the ternary side.

Downstream and end-use:

This week, prices of DC-side battery cabins in China and overseas remained overall stable. On August 11, the EPC general contracting tender announcement was released for the 500 MW/2,000 MWh grid-side independent shared energy storage demonstration project in Qixiang, Zhongning County, Xingchu, Ningxia Hui Autonomous Region. The project is located in Shikong Town, Zhongning County, Zhongwei City, Ningxia Hui Autonomous Region. It will build one 500 MW/2,000 MWh LFP electrochemical ESS power station, along with one 330 kV step-up substation and a 330 kV outbound transmission line project, as well as a comprehensive building, pump house, access roads, and other facilities. The planned construction period is 6 months. As an EPC turnkey project, it covers, including but not limited to, project filing and approval, construction implementation, design optimisation, construction drawing design, various specialised designs, document approvals, preparation of construction drawing budgets, and project construction related to this project.

News:    

[National Bureau of Statistics (NBS): From January to July, production of 3D printing equipment, lithium-ion battery, and industrial robot products increased 52.3%, 40.2%, and 28.5% YoY, respectively] NBS data showed that from January to July, the value-added output of industrial enterprises above designated size nationwide increased 5.3% YoY. By three major sectors, mining increased 2.5% YoY, manufacturing increased 5.6%, and electricity, heat, gas, and water production and supply increased 5.4%. Value-added output of the equipment manufacturing industry increased 9.7% YoY, and high-tech manufacturing increased 13.8%, respectively 4.4 and 8.5 percentage points faster than overall industrial enterprises above designated size. By ownership type, state-controlled enterprises increased 3.9% YoY; joint-stock enterprises increased 5.8%, foreign-funded and Hong Kong, Macao and Taiwan-invested enterprises increased 3.1%; and private enterprises increased 4.5%. By product, production of 3D printing equipment, lithium-ion battery, and industrial robot products increased 52.3%, 40.2%, and 28.5% YoY, respectively. In July, the value-added output of industrial enterprises above designated size nationwide increased 4.5% YoY and increased 0.11% MoM. In July, the manufacturing PMI was 49.2%, and the business activity expectations index was 54.1%. From January to June, industrial enterprises above designated size nationwide achieved total profits of 3,948 billion yuan, up 18.7% YoY.

[CATL Zeng Yuqun: Batteries that are not zero-carbon will be eliminated by the times] At the 2026 CATL Core Operations Carbon Neutrality Launch Conference, CATL Chairman Zeng Yuqun said that adhering to the carbon neutrality cause was for the sake of future generations, and in the future, batteries that are not zero-carbon will be eliminated by the times. Zeng Yuqun said climate change was a crisis that is truly happening—for example, Europe recently experienced its hottest June, with temperatures in Paris exceeding 40°C; and the geopolitical crisis that continued over the past half year once again exposed the fragility and risks of the fossil energy system. Meanwhile, the development of industrialisation, electrification, and artificial intelligence also continued to push up global energy and electricity demand. The greater the electricity demand, the higher the carbon emissions. (Jinshi Data APP)

[NBS spokesperson Wang Guanhua: The results of comprehensive efforts to address involution-style competition continue to emerge] On August 17, at a press conference held by the State Council Information Office, NBS spokesperson and Deputy Director-General of the Department of Comprehensive Statistics of the National Economy Wang Guanhua said that the results of comprehensive efforts to address involution-style competition continued to emerge. As governance of capacity in key industries and comprehensive efforts to address involution-style competition continued to take effect, supply and demand relationships in some industries improved. In July, prices for lithium-ion battery manufacturing and PV equipment and components manufacturing rose 8.9% and 2.8% YoY, respectively. In the next stage, relevant departments will further expand domestic demand, optimise supply, focus on fostering and strengthening new momentum, comprehensively address involution-style competition, create a fair competitive market environment, and continue to ensure supply and stabilise prices, promoting stable operation of industrial products prices. (Xinhua Finance)

Data source statement: Except for public information, other data are processed by SMM based on public information and market communication, relying on SMM’s internal database model, for reference only and not constituting decision-making advice.

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