[SMM Cobalt-Lithium Morning Meeting Summary] Lithium Chemicals Consolidate and Diverge, Industry Chain Supply-Demand Tug-of-War Intensifies

Lithium ore:

This week, lithium ore fundamentals remained tight, with the tightness mainly concentrated in available high-grade spot cargoes and nearby-month shipments. Processing fees at smelters rebounded, reflecting improved processing demand and bargaining in the smelting segment, but this does not mean ore supply has loosened; on the contrary, mine auction prices remained high, indicating marginal ore sources are still scarce. Notably, some high-priced auction cargoes were taken by traders outside China rather than flowing directly into domestic lithium chemical plants. On one hand, this shows traders still hold expectations for subsequent lithium prices and ore premiums; on the other, it means this portion of resources will not immediately convert into effective domestic supply in the short term, further tightening spot circulation. However, trader purchases also give high-priced ore certain inventory and speculative attributes, and whether it can be smoothly resold to lithium chemical plants still depends on whether lithium chemical prices and processing fees can hold up. Overall, ore prices still have relatively strong support, but the upward logic has gradually shifted from simple supply tightness to structural tightness driven by "spot scarcity plus trader stockpiling," and price elasticity may increase going forward.

Lithium carbonate:

This week, spot lithium carbonate prices rose first and then fell, showing an overall downward trend. The futures market was relatively weak. The most-traded 2701 contract drifted lower from 158,100-162,900 yuan/mt at the start of the week to 149,500-158,000 yuan/mt, after touching a mid-week high of 162,900 yuan/mt and then pulling back continuously, with a low of 149,500 yuan/mt, again approaching the key 150,000 yuan/mt level. Open interest rose first and then fell, with an intense tug-of-war between longs and shorts. Market trading showed a pattern of "active on declines, cautious on gains." Upstream lithium chemical plants shipped long-term contracts in early month as scheduled, and a small number of them showed stronger willingness to sell spot orders when prices rose above 160,000 yuan/mt; as prices drifted lower, willingness to sell spot orders weakened, with some holding prices firm and holding back from selling, keeping spot order quotes at 165,000 yuan/mt and above. Downstream material plants showed continued recovering purchase willingness for spot orders at 155,000 yuan/mt and below, with strong dip-buying interest; however, after prices shot up, willingness to chase gains was insufficient and purchasing turned cautious. Overall, market inquiries and actual transactions were relatively active, but the gap between upstream and downstream price expectations persisted. Supply continued to recover, with September production expected to increase about 11% MoM. In August, domestic lithium carbonate supply gradually rebounded as some maintenance at spodumene, lepidolite, and salt lake operations ended and production resumed. Salt lake lithium extraction output increased due to seasonal factors, but some salt lake producers underwent maintenance, keeping overall production basically stable. Entering September, as maintenance across raw material segments ends and production resumes, output will rise significantly; the recycling segment also saw higher output, benefiting from downstream demand recovery. Inventory changes: Upstream lithium chemical plants increased spot sales at high prices, reducing inventories. Downstream material plants saw basically stable inventories as long-term contracts and customer-supplied materials were delivered, while spot purchases increased after prices fell. Trader inventories saw slight destocking.

Lithium hydroxide:

The spot lithium hydroxide market remained weak today. Mainstream quotations for coarse-particle products edged lower, closing at 137,000-151,500 yuan/mt, down 750 yuan/mt on the day, with market sentiment fluctuations intensifying.

Supply side, lithium chemical plants had limited room to cut prices due to cost support and maintained a firm stance on pricing. Although the discount in the trade segment widened slightly, downstream purchases favored direct transactions with producers, leaving trade-side activity subdued.

Demand side, downstream enterprises showed weak overall purchasing this week, with some manufacturers seeing orders fall short of expectations and remaining cautious about restocking. Meanwhile, some cathode material enterprises, driven by production schedules and pre-holiday raw material stockpiling ahead of the National Day holiday, continued to pick up goods during the week, releasing small spot demand on top of long-term contracts. Transaction prices were at a slight discount to the website average price, with no notable loosening in discount coefficients.

Overall, spot lithium hydroxide prices hovered near 142,000 yuan/mt this week, with overall subdued trading sentiment.

Refined cobalt:

The refined cobalt market consolidated this week, with e-trading prices fluctuating narrowly around 300,000 yuan/mt and limited overall volatility. Supply side, mainstream smelters maintained EXW prices at 310,000 yuan/mt. Trader quotations held the spot-futures price spread steady at a premium of 1,000-13,000 yuan/mt. Spot supply remained steady, and firm ore-side pricing continued to provide some support to the price floor. Demand side, downstream enterprises gradually resumed procurement as summer breaks ended, but concerns over further price declines kept purchases cautious, mostly limited to small rigid-demand orders, with no bulk buying emerging. In the short term, supply-side price support and slower-than-expected demand recovery are offsetting each other, leaving limited room for price movement in either direction. Prices are expected to continue consolidating, with attention on the pace of downstream procurement recovery and the potential for concentrated restocking.

Intermediate products:

The cobalt intermediate product market remained in stalemate this week, with the psychological price gap between upstream and downstream widening further. Supply side, most miners held offer indications near $19-20/lb. Demand side, downstream purchase intentions were further lowered to around $15-16/lb. The divergence between buyers and sellers deepened, making transactions difficult to advance, and recent tenders largely failed. In the short term, the game between miners holding prices firm and downstream pushing for lower prices is still deepening. With the price spread failing to converge, it is difficult for substantial transactions to materialize in the market. Attention will be paid to whether miners' quotation strategies show signs of loosening.

Cobalt salts (cobalt sulphate and cobalt chloride):

This week, cobalt sulphate market prices remained stable, but pressure from a weakening cost side and sluggish demand continued to build.Cost side, MHP cobalt payables continued to edge down, with transactions seen at 65% this week, bringing spot production costs down to around 60,000 yuan/mt, further weakening cost support. Supply side, mainstream quotations from smelters were mainly anchored at three levels: 63,000 yuan/mt, 65,000 yuan/mt, and 68,000 yuan/mt, with the differences mainly stemming from raw material types and varying shipment pressures among enterprises. In the trade segment, some traders, worried about further price declines, were considering selling old cobalt sulphate stocks at low prices around 61,000-62,000 yuan/mt. Demand side, this year's peak season characteristics were not obvious. Some ternary enterprises began making inquiries, but there was no proactive intention to conclude transactions. Co3O4 enterprises, constrained by high inventory and sluggish demand, still showed no purchase willingness. In the short term, although current market prices have not yet declined, under multiple pressures including persistently weakening raw material costs, low-price sell-offs in the trade segment, and sluggish downstream demand, prices may continue to drift lower in September-October. The recovery of market confidence still awaits a clear improvement in demand or supportive policy boosts.

This week, cobalt chloride market prices edged down WoW, with transactions remaining sluggish.From the transaction structure perspective, only a few sporadic short-term contracts were concluded in the market this week. Most cobalt chloride enterprises' shipments were still dominated by previously signed long-term contracts, with actual circulation mainly supported by rigid demand and lacking incremental buying. Supply side, against the backdrop of persistently subdued market sentiment and insufficient downstream purchase willingness, several upstream producers took the opportunity to halt production for maintenance, proactively curtailing output to ease inventory and loss pressures. Demand side, downstream buying sentiment was negative, with most taking a wait-and-see or even bearish attitude toward September demand. Recently, due to rising costs of memory chips and other components, several major domestic smartphone brands have raised the selling prices of models currently on sale, which may suppress end-user replacement demand and cast doubt on the strength of peak-season restocking. Overall, the cobalt chloride market is expected to remain bearish in the short term.

Cobalt salts (Co3O4):

This week, Co3O4 prices were mainly flat, with sluggish market trading and no actual transactions heard to have been concluded.Although upstream cobalt chloride prices continued their slow decline, the loosening on the cost side has not yet been effectively transmitted to Co3O4. Top-tier players generally adopted a wait-and-see attitude, keeping quotations stable with no proactive intention to lower them. Supply side, most producers maintained normal production pace, with no significant contraction in output. Demand side, cathode material plants remained cautious in procurement, with few actual orders concluded. Overall, in the absence of effective transaction guidance, Co3O4 prices are expected to continue moving sideways in the short term.

Nickel sulphate:

As of Thursday this week, SMM battery-grade nickel sulphate average prices declined.

From the demand side, affected by a pullback in downstream orders, some downstream enterprises saw their operating rates shift lower this month, mainly picking up goods under long-term contracts, with weak sentiment for spot order stockpiling and low acceptance of nickel salt prices; from the supply side, some upstream enterprises held relatively high inventory levels and had plans to lower operating rates and seek shipments for destocking. Looking ahead, the market is expected to maintain a weak supply-demand pattern in the short term, with destocking as the main focus, and prices are expected to remain under pressure overall.

Inventory-wise, this week the upstream nickel salt smelter inventory index slipped from 8.1 days to 8 days, the downstream precursor plant inventory index rose from 9.3 days to 12.9 days, and the integrated enterprise inventory index rose from 9.4 days to 9.8 days; in terms of buying and selling strength, this week the upstream nickel salt smelter Willingness to Sell Sentiment Factor held at 2.0, the downstream precursor plant purchasing sentiment factor slipped from 2.3 to 2.2, and the integrated enterprise sentiment factor held at 2.3. (Historical data can be queried in the database)

Ternary cathode precursor:

This week, ternary cathode precursor prices weakened, with nickel sulphate prices declining during the week, while cobalt sulphate and manganese sulphate prices held steady.

In terms of discounts, for September and Q3 orders, some producers still intended to hold prices firm due to the higher cost of sulphate raw materials earlier. For long-term contracts, some producers had already agreed on annual contracts at the beginning of the year, and most producers had not yet raised their coefficients; downstream acceptance of coefficient increases for quarterly orders also remained weak. Except for some top-tier producers with certain bargaining power, most producers remained stable overall compared with Q2. For spot orders, as nickel and cobalt salt prices have been relatively weak recently, some downstream enterprises sought raw material toll processing or expanded in-house production, and September order coefficients remained under pressure.

In terms of production, top-tier producers continued to see strong export orders this month, with production schedules at relatively high levels. Some domestic top-tier producers had slight expectations of reduction in medium-nickel orders, while some other small and medium-sized producers still maintained relatively low production schedules due to the off-season.

Looking ahead, sulphate prices have yet to show a clear rebound, and new order prices will need to focus on actual downstream demand during the September-October peak season.

Ternary cathode material:

This week, ternary cathode material prices continued to show small fluctuations.From the raw material side, nickel sulphate prices remained weak, cobalt sulphate prices stayed stable, and lithium carbonate and lithium hydroxide prices pulled back continuously after surging sharply early in the week. Lithium chemicals remain in a clear consolidation phase, with producers still cautious about placing orders. In terms of transactions, due to wild swings in raw material prices, battery cell manufacturers remain reluctant to restock, leaving market trading relatively sluggish and focused mainly on fulfilling existing orders. On the demand side, leading ternary battery cell manufacturers recently cut orders sharply for September and Q4, with mid- and high-nickel material orders hit hardest, mainly because sales of some high-end car models in China fell short of expectations. With ample raw material inventories, battery cell manufacturers proactively slowed their cargo pick-up pace; combined with cathode plants having accumulated finished product inventories earlier, cathode plants are likely to focus on drawing down inventories and hold off on new production in the near term, dragging down China's ternary cathode production schedules in September. For overseas demand, high-nickel material orders remain high recently, driven by expectations that lithium battery export controls are about to be restored. In the consumer market, demand remains mediocre and even shows signs of pulling back slightly further; the official restoration of lithium battery export tax rebates is also exerting some restraint on near-term delivery pace.

LFP:

This week, China's LFP market supply-demand pattern showed no significant change WoW. In terms of prices, the average LFP price this week was 58,355 yuan/mt, up 633 yuan/mt from 57,722 yuan/mt last week, an increase of about 1.10%. Over the same period, weekly lithium carbonate prices rose by a cumulative 3,000 yuan/mt, with rising raw material prices continuing to support LFP costs and prices. In the market, downstream demand remained solid and orders were robust, driving an increase in orders for LFP enterprises and keeping production activity at high levels. This week, new production lines continued to contribute growth, and new capacity kept ramping up, increasing industry supply, but the overall supply-demand pattern did not become notably looser, with the market still in a tight balance. Looking ahead, downstream demand is expected to remain robust in the short term, and the pace of new capacity release along with lithium carbonate price trends will jointly shape the LFP market; it is worth monitoring new production line ramp-up progress, production release, and changes in downstream orders.

Iron phosphate:

This week, SMM iron phosphate prices edged up slightly. Upstream and downstream enterprises have now begun negotiating new orders for September, and newly signed orders are still being raised gradually. Upstream enterprises, based on the current tight supply-demand market pattern, maintain their intention to raise prices, but the overall increase is smaller than earlier, with the pace of price hikes slowing. At present, upstream raw material prices such as phosphoric acid and industrial ammonium continue to fall steadily, and downstream enterprises do not want prices to keep rising, so the two sides still hold some differences. Iron phosphate prices are expected to edge up slightly in the short term.

LCO:

This week, LCO market prices remained stable, with overall fundamentals still weak and the peak-season boost falling short of expectations. Supply side, overall fluctuations were limited. Cathode producers maintained low operating rates and a produce-based-on-sales strategy, keeping industry output relatively stable. Demand side, performance was mediocre. Downstream purchases remained primarily need-based, with no large-scale concentrated stockpiling emerging. The traditional "September-October peak season" seasonal boost did not materialise as expected, market expectations for peak-season stockpiling cooled, the pace of inventory digestion across the industry chain remained slow, and the supply-demand pattern has yet to show substantive improvement.

Overall, at the current stage, the cost side provides some support, and with no further push for lower prices from downstream, LCO prices have gained some breathing room in the short term, with the market largely stable and consolidating. However, end-use demand lacks upward momentum. If terminal stockpiling in September continues to fall short of expectations, the market still faces potential downside risk.

Anode:

This week, artificial graphite anode prices remained stable.Supply-demand side, supply remained tight and destocking continued to advance, with anode production schedules rising alongside "September peak season" stockpiling. Cost side, upstream coke and graphitisation tolling services prices both rose notably, providing strong cost support. However, after a modest price increase in early August, the market is still in a digestion and transition period, with battery manufacturers adopting a "volume-for-price" strategy to cap artificial graphite price gains. Natural graphite continued to weaken: end-use demand showed no improvement, flake graphite and spherical graphite raw material prices were stable and lacked upward impetus, and prices lingered near the cost line at low levels for an extended period, with buyers and sellers in a stalemate.

Looking ahead, artificial graphite is supported by rising peak-season terminal production schedules, tightening supply, and higher coke and graphitisation costs, leaving further upside room for prices, though gains will be constrained by how well they are passed through to battery manufacturers. Natural graphite is unlikely to see a turnaround in the short term and is expected to consolidate at lows.

Separator:

This week, separator prices continued to move sideways, with quotation ranges for all specifications largely in line with last week.Looking at specific quotations, prices for high-end wet-process separator products were firm: 5μm (5μ+2μ) was quoted at 1.57-1.87 yuan/m², 7μm (7μ+2μ) mainstream quotations were 1.14-1.337 yuan/m², and 9μm (9μ+3μ) was quoted at 1.135-1.29 yuan/m². Based on actual August operating data, separator production rose 4.61% MoM, while terminal production schedules increased 11.59% MoM over the same period. Production growth was less than half of terminal growth, and the supply-demand gap widened further. Entering September, separator production is expected to rise 3.3% MoM, while terminal production schedules are expected to increase 8.12% MoM. Production growth is still significantly lower than demand growth, and the supply-demand divergence is expected to continue expanding. Currently, top-tier separator producers are running at full capacity, and second- and third-tier players are also operating at high rates. However, constrained by the slow release of new capacity (still primarily through line-by-line upgrades), overall supply elasticity is limited.

Electrolyte

This week, electrolyte market prices edged up.Cost side, LiPF6 prices were stable this week. On one hand, most orders had already been signed, with few new orders, and market transactions turned sluggish. On the other hand, although tight supply-demand conditions had earlier driven prices higher, cost pass-through to the electrolyte segment was incomplete, and electrolyte producers had relatively limited tolerance for raw material price increases, capping LiPF6 price gains in the short term. For additives, with VC market prices already at relatively high levels, producers' sentiment to push prices higher weakened. Combined with most orders already signed, VC prices were relatively stable recently. Solvents were recently affected by rising crude oil prices, lifting costs and pushing prices higher. Overall, the pass-through of raw material price increases to electrolyte has a time lag and has not yet fully materialised. At the same time, battery cell manufacturers themselves face certain difficulties in passing costs downstream and have relatively limited tolerance for electrolyte cost increases. As a result, electrolyte prices rose, but only modestly. Supply-demand side, the EV market was boosted by the traditional "September-October peak season," and the ESS sector had full order books. These dual positives boosted battery cell production, which in turn drove electrolyte production growth. Overall, the subsequent trajectory of electrolyte prices still requires continued monitoring of raw material price changes and the progress of their pass-through downstream.

Sodium-ion battery:

Recently, the sodium-ion battery materials market has shown a divergent pattern of "cathode undersupply, anode volume growth with low prices."In the cathode segment, the supply gap is difficult to close in the short term. Top-tier players are running at full production and full sales, with orders spilling over. Capacity expansion alongside toll processing has become key to breaking the deadlock. Hard carbon anodes, meanwhile, are under profitability pressure amid rapid volume ramp-up, with cost control and product differentiation being the main levers for navigating the cycle. Going forward, with the continued release of two-wheeler and energy storage demand, as well as the successive commissioning of new and existing capacity in Q4, the sodium-ion battery materials segment is expected to enter a window of rising volumes and profits. However, the pace of profit realisation still requires close tracking of marginal changes in terminal volume ramp-up and industry chain price negotiations.

Recycling:

Raw material side, lithium carbonate prices shot up and then pulled back this week. Nickel sulphate prices continued to edge down, while cobalt sulphate prices saw their decline pause and consolidated at lows.This week, by ternary, LCO, and LFP material types, on the LFP hydrometallurgy side: taking LFP electrode black mass as an example, current LFP electrode black mass prices were 6,700-7,050 yuan per % lithium, edging down from Monday's transaction levels, then pulling back in line with lithium prices, though still up from last month's transaction prices. LFP battery black mass prices were currently 5,850-6,300 yuan per % lithium, with the price spread versus electrode black mass still maintained at a high level of around 800 yuan per % lithium. On the ternary and LCO side, ternary electrode black mass nickel and cobalt payables were around 76%, down about 1 percentage point from Monday. Some high-nickel ternary electrode black mass, such as 8-series and 9-series, still transacted at around 77-78%, but also showed a slight decline. LCO electrode black mass cobalt payables were 73-75%, and LCO electrode black mass lithium payables were 72-75%. At the current stage, secondary cobalt sulphate prices saw their decline pause and consolidated at lows, but downstream LCO hydrometallurgy enterprises remained very cautious in purchasing, with sluggish market transactions. Moreover, black mass of pure cobalt and high-cobalt types continued to use separate cobalt and lithium pricing, with current prices slightly lower than the ternary side.

Downstream and end-users:

This week, with the consumption tax taking effect, domestic integrated system prices are expected to edge up.In markets outside China, competition in the European market intensified, and battery cabin prices in some regions still showed a slight downward trend. On 2 September, the independent shared grid-forming all-vanadium flow ESS power station project (EPC) in Shuangbai County, Chuxiong Yi Autonomous Prefecture, Yunnan announced bid winner candidates, with China Construction Third Engineering Bureau Group Co., Ltd. proposed as the bid winner. First bid winner candidate: China Construction Third Engineering Bureau Group Co., Ltd., with consortium member PowerChina Jiangxi Electric Power Design Institute Co., Ltd., design quote 3.1 million yuan, equipment quote 2 yuan/Wh, construction quote 3.01%. Second bid winner candidate: China Railway 18th Bureau Group Second Engineering Co., Ltd., with consortium member Sichuan Electric Power Design & Consulting Co., Ltd., design quote 3.185 million yuan, equipment quote 1.99 yuan/Wh, construction quote 3.2%. Third bid winner candidate: PowerChina Kunming Engineering Co., Ltd., with consortium member Yunnan Chengpeng Electric Power Engineering Co., Ltd., design quote 3 million yuan, equipment quote 1.98 yuan/Wh, construction quote 3.14%.

News:   

[MIIT Xiong Jijun: Support all parties in concentrating efforts to achieve breakthroughs in all-solid-state battery, sodium-ion battery, lithium metal battery and other technologies]Vice Minister of Industry and Information Technology Xiong Jijun stated that the ministry will further strengthen technological innovation, support upstream and downstream forces to concentrate efforts on breakthroughs in all-solid-state battery, sodium-ion battery, lithium metal battery and other technologies, accelerate the R&D and application of new material systems and new process structures, and synergistically improve the energy density, safety, durability and other performance attributes of power batteries. It will further strengthen standards leadership, accelerate the formulation of standards for power battery safety performance, cycle life, carbon footprint, recycling and other areas, actively promote alignment of the standards system with international standards, strengthen verification of implementation and enforcement, and use standards upgrades to lead improvements in quality and competitiveness. (Jin10 Data APP)

[Minmetals New Energy: Company initiates mass production preparations for 4th-generation LFP power first-firing products]On 3 September, Minmetals New Energy stated at the 2026 H1 new energy industry collective results briefing on the STAR Market that the company's 4th-generation LFP power first-firing products have passed customer evaluation and initiated mass production preparations. The 4th-generation and 4.5-generation second-firing products have completed trial production and are undergoing scale evaluation by multiple customers. The hundred-tonne-scale pilot production line for sodium-ion battery materials is planned to be completed and put into operation within the year. (Jin10 Data APP)

[CATL Robin Zeng: New vehicle launches compete on speed, specifications and price, but battery quality should not be sacrificed]CATL Chairman Robin Zeng said that in H1 this year, domestic NEV sales exceeded 7.4 million units, with more than 600 new models launched, averaging nearly three per day. Everyone is competing on speed, specifications and price, with development cycles getting shorter and shorter. He said that power batteries require extremely high precision and have extremely low fault tolerance. In mass production, all small problems are magnified many times over. Every process and every parameter must be strictly controlled at the design stage, anomalies must be identified in advance, and there must be zero tolerance for quality issues. (Jin10 Data APP)

Data source statement: Except for public information, all other data are processed by SMM based on public information, market communication, and SMM's internal database models, and are for reference only and do not constitute decision-making advice.

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