[SMM Cobalt-Lithium Morning Meeting Summary] Raw material price trends diverge; supply-demand support for battery materials varies in strength

Lithium ore:

This week, the main theme in the lithium ore market was the sharply widening gap between the "tight nearby supply reality" and the "loose forward expectations." On the first trading day after the holiday, quotes from both miners and lithium chemical producers initially moved higher in tandem. Spot trading of high-grade spodumene was relatively active, and trader sentiment toward holding back from selling strengthened. Lithium chemical plant capacity was mainly constrained by maintenance and voluntary production cuts, with weekly lithium carbonate production pulling back slightly MoM. Output from spodumene-based lithium extraction, salt lake operations, and recycling all declined, while only lepidolite-based output increased slightly. Some mines in Jiangxi maintained a tight supply pattern, and elevated processing fees at the mining end also reflected that raw materials were not abundant. Inventory continued to destock, but the structure diverged notably: the destocking was driven mainly by cathode material plants consuming in-plant raw material inventories, while trading inventories also moved lower. In contrast, raw material inventories at smelters and battery cell producers accumulated slightly. Total social inventory remained on a sustained downward trajectory, and available spot order resources were tight. By comparison, forward supply signals landed densely this week—the environmental assessment for the Jianxiawo lithium mine in Yichun re-entered the public notice stage for proposed acceptance, the safety facility design for another lepidolite mine project in Jiangxi passed review, and combined with the resumption of lithium concentrate shipments from Zimbabwe and production resumptions at some Australian and African projects, the market began pricing in 2027 supply growth ahead of schedule. Meanwhile, downstream October lithium battery production schedules showed MoM growth clearly narrowing from September, and terminal new energy vehicle retail data weakened YoY, prompting a reassessment of the peak season's strength. In terms of profit transmission from ore to lithium chemicals, miners initially attempted to hold prices firm in line with lithium chemicals, but as lithium carbonate futures fell sharply and processing margins for externally purchased ore were compressed to near the cost line, smelters turned more cautious in procurement and price fixing. The support for ore pricing weakened marginally, and ore prices shifted from following the rally to following the pullback. Overall, this week was not a sudden deterioration in spot fundamentals, but rather a shift in the pricing center from "current destocking" to "forward surplus," which temporarily weakened miners' ability to hold prices firm. Worth watching next week: the actual pace of production resumptions at Jianxiawo, verification of Zimbabwe's ban enforcement and port arrivals, and whether smelters' raw material procurement and maintenance arrangements under losses can provide a floor for spot prices.

Lithium carbonate:

On October 12, SMM battery-grade lithium carbonate spot quotes were 111,500-119,300 yuan/mt, with an average price of 115,400 yuan/mt, down sharply by 6,950 yuan/mt from the previous trading day, a decline of about 5.7%, marking a heavy single-day drop. The most-traded lithium carbonate futures contract 2701 opened lower and moved lower, hitting an intraday low of 105,320 yuan/mt, with the largest intraday decline approaching 11%. Open interest stood at 440,000 lots, up by about 17,000 lots, presenting a pattern of falling prices on rising volume and open interest. Supply side, according to SMM data, lithium carbonate production last week was 25,418 mt, down 523 mt WoW, with production from spodumene-based lithium extraction, salt lake lithium extraction, and recycling-based lithium extraction all declining to varying degrees. October production schedule (including slag-based lithium extraction) is expected to be 118,000 mt, with limited growth. Demand side, peak-season production schedules remain stable. In October, SMM total battery cell production schedule is approximately 320 GWh, up about 6% MoM; LFP cathode material production schedule is approximately 500,000 mt, up about 4% MoM; ternary cathode material production schedule is approximately 84,000 mt, up about 3% MoM. Demand data itself is not weak, and the supply-demand pattern remains tight. However, the current peak-season demand has been fully priced in by the market, and the pricing focus of futures has shifted to supply-demand expectations for next year. Inventory side: destocking continues. As of October 8, SMM total inventory was 139,517 mt, down 9,260 mt from before the holiday. The destocking was mainly driven by cathode plant consumption (down 8,347 mt MoM), with the trade segment also destocking (down 1,445 mt), while upstream inventory increased slightly by 201 mt. The absolute inventory level continues to converge toward lows, providing some support to spot prices. Today's increase in open interest accompanied by falling prices indicates that bearish funds are actively entering the market, and market consensus on the downside direction is strengthening. after losing the 110,000 yuan mark, the bearish technical pattern has been established, and lithium carbonate prices are likely to remain in the doldrums in the short term.

Lithium hydroxide:

At the start of the week, coarse-particle lithium hydroxide prices fell sharply from the previous day, mainly due to demand-side disruptions that kept lithium chemical market sentiment persistently sluggish. In terms of quotes, lithium chemical plants have become more passive in their selling stance, with less willingness to hold prices firm than before. They hold a strong wait-and-see sentiment at current price levels and are less willing to sell. Demand volume from ternary cathode material enterprises is broadly in line with expectations, but against the backdrop of continued price declines, purchasing activity has become more cautious. Among traders, the basis has strengthened slightly, and overall transactions remain sluggish. Overall, market transactions remain sluggish, wait-and-see sentiment is strong, and short-term prices are expected to remain in the doldrums.

Refined cobalt:

At the start of this week, the refined cobalt market maintained a consolidation pattern. After refined cobalt futures prices continued to fall, traders raised their quoted basis. Currently, virtually no enterprises are quoting at parity, with the minimum quoted basis at 1,000-2,000 yuan. Mainstream smelters maintained Ex-works prices at 270,000 yuan/mt. Downstream demand remains sluggish, and enterprises are still restocking only for rigid demand. Overall, until various cobalt products stop falling and downstream forms sustained restocking, refined cobalt prices do not yet have the conditions to break out of consolidation at lows.

Intermediate products:

At the start of this week, the cobalt intermediate product market continued its sluggish pattern of no quotes, no inquiries, and no transactions. But beneath the calm, the psychological price levels of buyers and sellers remain locked in a quiet standoff. Supply side, earlier, top-tier overseas players announced plans to purchase intermediate products in the market at $14.5/lb, with a clear intention to support prices, which is currently the main supporting factor for the market. Demand side, downstream purchasing willingness remains sluggish, and some miners and downstream enterprises reported that, against the backdrop of sustained drops in other cobalt product prices, they can currently only accept prices below $13/lb. At present, there is still a clear gap between the support purchase price and downstream psychological price levels. The direction of the intermediate product market after the holiday will depend on the actual transaction situation of support purchases and the negotiation results between miners and smelters.

Cobalt salts (cobalt sulphate and cobalt chloride):

At the beginning of this week, cobalt sulphate prices continued to grind lower.Although mainstream enterprises maintained cobalt sulphate quotes near 60,000 yuan/mt this week, actual transactions were very difficult, and downstream still showed no purchasing intention. Some downstream players believe cobalt sulphate prices will fall below 50,000 yuan/mt in the future. Under the influence of bearish sentiment, only a few enterprises made just-in-time procurement. Although there were no new transactions for MHP cobalt payables and recycled cobalt payables, the overall trend is still declining, and cost support continues to weaken, opening new room for smelters to cut prices and sell. Before a substantive improvement in demand emerges, the cycle of "price cuts—losses—raw material pressure—cost declines—further price cuts" is expected to continue dominating the direction of the cobalt sulphate market.

At the beginning of this week, cobalt chloride quotes were temporarily stable, but the price center remained below pre-holiday levels, and enterprises' willingness to further lower quotes weakened.Supply side, demand has yet to show improvement, and the entire industry remains in a destocking phase. September cobalt chloride production fell significantly MoM, and production cuts remain the main way for producers to relieve inventory pressure. Enterprises that had planned to resume production before the holiday turned to a wait-and-see stance due to persistently weak downstream demand, and the scope of production suspensions continued to expand. Demand side, production cuts in the downstream Co3O4 segment continued to widen, further contracting raw material procurement demand. Market transactions remained sluggish, dominated by very small spot orders and internal self-supply within integrated enterprises. Additionally, with the industry's annual conference held this week, most market participants chose to reduce trading and generally waited for order settlements during and after the conference. Market trading activity visibly cooled, and short-term price fluctuation room is limited. Overall, if demand still shows no substantive recovery after the conference, short-term cobalt chloride prices will likely maintain a narrow decline.

Cobalt salts (Co3O4):

At the beginning of this week, Co3O4 quotes were basically flat WoW, but the post-holiday price center has shifted further down compared with pre-holiday levels. The market remains in a grinding-down atmosphere, and pessimistic expectations have yet to reverse. Supply side, affected by persistently weak downstream demand, many enterprises remained in a state of production cuts, with some still holding relatively high inventory levels. Demand side, current shipments were mainly for delivering earlier long-term contracts and undertaking processing business, with new purchases nearly absent. Industry participants were mostly waiting to trade after this week's annual industry conference; if market sentiment fails to improve after the meeting and trading remains sluggish, prices may continue to decline. Overall, Co3O4 prices are expected to remain on a narrow downward trend in the short term.

Nickel sulphate:

On October 12, SMM battery-grade nickel sulphate average prices declined.

Cost side, nickel prices remained under pressure from both macro factors and fundamentals, and spot production costs for nickel sulphate fell; supply side, some producers held high inventory levels and sought to cut production to destock, but as the nickel sulphate-SHFE nickel price spread continued to widen, production schedules at refined nickel conversion and recycling enterprises are unlikely to see a significant decline; demand side, some downstream enterprises still relied mainly on long-term contract supply, with weak sentiment for building spot inventories and relatively low acceptance of nickel salt prices. Today, the Willingness to Sell Sentiment Factor for upstream nickel salt smelters was 2.1, the purchasing sentiment factor for downstream precursor plants was 2, and the sentiment factor for integrated enterprises was 2.2 (historical data can be accessed in the database).

Looking ahead, spot market activity is expected to remain weak in the short term, and nickel sulphate prices will remain under pressure overall.

Ternary cathode precursor:

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

Discount-wise, for October and Q4 orders, some producers still intended to hold coefficient levels firm due to higher raw material costs for sulphate salts earlier in the period. Long-term contract-wise, some producers had already agreed on annual contracts at the beginning of the year, and most producers had not yet raised coefficients; downstream acceptance of coefficient increases for quarterly contracts also remained weak, with Q4 long-term contract coefficients expected to remain stable and in the doldrums. Spot order-wise, given the relatively weak performance of nickel and cobalt salt prices recently, coupled with sluggish downstream demand at some producers, October order coefficients are expected to decline.

Production-wise, top-tier producers continued to see strong export orders this month, with production schedules at relatively high levels. However, some domestic top-tier producers saw operating rates decline due to end-use demand falling short of expectations and tight supply of key raw materials. Although this month showed slight improvement MoM, overall levels remained below the Q3 peak.

Looking ahead, sulphate salt prices have yet to show a clear rebound, and pricing for new orders will need to track actual downstream demand in Q4.

Ternary cathode material:

At the start of this week, ternary cathode material prices declined once again. Raw material side, nickel sulphate prices continued to grind lower, cobalt sulphate prices kept falling, and lithium carbonate and lithium hydroxide prices dropped sharply again on expectations of downward revisions to battery cell production schedules, dragging ternary cathode material prices notably lower. Trading-wise, with raw material prices falling steeply and showing no signs of stopping, market buying sentiment turned more cautious, with participants largely staying on the sidelines; meanwhile, as raw material prices declined significantly, discount coefficients could be lowered further. Demand side, China's ternary EV market maintained a weak recovery in October, with overall Q4 expectations still subdued; outside China, EV market orders were relatively better but showed no further new demand; the digital consumer market got a boost from some new phone launches in September.

LFP:

During the National Day holiday, LFP market fundamentals continued to consolidate on a strong note, battery cell orders performed well, and production enthusiasm across the industry chain remained high. New orders and transactions during the holiday were relatively limited, with market activity mainly reflecting continued execution of earlier orders and normal enterprise production schedules. Currently, battery cell enterprises' LFP inventories are generally at low levels, and some battery cell manufacturers proactively stockpiled before the National Day holiday, supporting solid order performance in October. Supply side, leading LFP enterprises have largely ramped up production to full capacity, premium production lines are running near full load, and cathode material enterprises remain highly motivated to produce. However, as production release still falls short of order demand, LFP enterprises' finished product inventories continued to decline, with the industry extending its destocking trend. Price-wise, LFP prices rose this week along with lithium carbonate prices. As of 8 October, the SMM average price for LFP (powder compaction density ≥2.5g/cm³) was 50,400 yuan/mt, up about 520 yuan/mt WoW from the last quoted day, and short-term market fundamentals are expected to consolidate on a strong note. Going forward, attention should be paid to post-holiday demand realisation, enterprise production ramp-up, and lithium carbonate price trends.

Iron phosphate:

Before the holiday, most enterprises had already quoted prices and signed orders in advance, with some enterprises' pre-holiday orders largely finalised, so new orders during the National Day holiday were limited and market trading activity was relatively subdued.However, this reduction in transactions was mainly due to front-loaded orders rather than any notable weakening in downstream demand. Production side, iron phosphate enterprises remain highly motivated to produce. On one hand, overall profitability for iron phosphate is relatively good, giving enterprises strong incentives to produce; on the other hand, downstream demand remains robust and orders are relatively sufficient, further supporting enterprises in maintaining high operating rates. In terms of prices, new order prices for iron phosphate during the National Day holiday still rose somewhat compared with September, but the increase was clearly limited, and some producers' new order prices were even basically flat versus September. This indicates that has begun to moderate, and resistance to price increases in the market is gradually building.

LCO:

After the National Day holiday, China's LCO market remained generally weak overall. The traditional peak-season expectations that the market had previously anticipated failed to materialize, and industry fundamentals remained under pressure. Upstream Co3O4 prices continued to decline, and cost support kept weakening, dragging LCO product quotes lower as well. On the supply side, domestic cathode material producers generally maintained a cautious production schedule strategy of producing based on sales, keeping industry output stable. However, weakness on the demand side was pronounced, as downstream end-user clients showed limited willingness to stockpile, with procurement mostly consisting of small, just-in-time restocking. Inventory digestion across the industry chain remained relatively slow, and the supply-demand pattern had yet to show any substantive improvement. The dual pressure from falling costs and sluggish end-use demand persisted. Overall, the weak LCO market continued after the holiday, with prices drifting lower. If end-use demand subsequently fails to improve and peak-season conditions remain absent, LCO prices still have room to decline further.

Anode:

This week, the price center for artificial graphite anodes edged up slightly. Cost-side support remained firm, with petroleum coke and needle coke prices stabilizing at highs, while graphitisation tolling fees also showed a steady-to-higher trend . The supply-demand balance remained tight, and anode material orders rose steadily during the peak season, with destocking progressing continuously across producers. Overall anode material processing trended upward, but due to persistent pressure from battery cell manufacturers to push for lower prices, the actual increase in artificial graphite prices was limited. Natural graphite, meanwhile, remained in the doldrums, with no clear improvement in end-use demand and prices lingering near cost levels at lows for an extended period, leaving buyers and sellers in a stalemate.

Looking ahead, cost support for artificial graphite is expected to remain relatively solid, and with end-use demand continuing to be released and the destocking pace unchanged, prices still have upward momentum. Natural graphite is unlikely to see a reversal in the short term and is expected to consolidate at lows.

Separator:

During the holiday, China's separator market operated steadily, with prices holding stable. On the demand side, EV and ESS provided dual drivers, compounded by an export rush. For EV applications, the auto market entered the year-end push for annual targets, with battery cell manufacturers maintaining high production schedules, and the commissioning of large-cell capacity continued to drive the shift from 7μm to 5μm. For energy storage, robust utility-scale ESS demand both in China and overseas tightened supply of 9μm products. In addition, the export VAT rebate rate for batteries will be fully eliminated from January 1, 2027, prompting both EV and ESS battery cells to accelerate production and delivery within the export window, with some overseas demand for 2027 pulled forward into Q4, further boosting separator procurement volumes. Supply-side constraints remained unchanged—wet-process capacity utilization stayed above 90%, and the inventory absorption cycle was less than one month, giving separator producers a solid basis to hold prices firm. In our assessment, the market entered a critical Q4 window after the holiday: the combination of year-end EV volume pushes, ESS installation rushes, and export rushes drove end-use production schedules higher MoM, and the separator supply gap is set to widen further. It should be noted that export-rush demand is front-loaded in nature, and demand in early 2027 may see a phased pullback, which is the biggest medium-term uncertainty.

Electrolyte

This week, electrolyte market prices rose somewhat, mainly driven by the lagged pass-through of earlier raw material price increases. From the cost side, LiPF6 prices showed no significant fluctuation this week. Trading sentiment was sluggish before the National Day holiday, and with lithium carbonate feedstock prices continuing to slide, overall cost support weakened. Although producers raised their offers, spot order transactions were relatively limited, and prices remained temporarily stable. For the additive VC, although the current tight supply-demand situation has not yet eased, mainstream producers kept prices stable from a long-term operating strategy perspective, given that industry profits remained at a relatively high level. On the solvent side, upstream feedstock prices were generally stable recently, but battery-grade EC prices moved higher, supported by downstream demand. Overall, because electrolyte cost pass-through has a certain lag, the earlier rise in raw material prices has gradually been reflected in electrolyte prices recently. Looking ahead, against the backdrop of the traditional September-October peak season, downstream demand is expected to maintain a certain growth momentum, which will in turn boost electrolyte production and provide positive support for electrolyte raw material demand and prices. Combined with the lagged effect of cost pass-through, the electrolyte market still has some upward potential.

Sodium-ion battery:

During the National Day holiday, the sodium-ion battery industry chain largely maintained its pre-holiday pattern, with no notable changes. On the materials side, mainstream cathode producers carried out staggered production as previously arranged: some producers halted operations from mid-holiday for maintenance, with toll processing entities stepping in to ensure supply, and delivery of core client orders was unaffected. Construction of newly signed 10kt-scale production lines progressed normally. On the anode side, some producers proceeded with debugging and trial production preparations for new production lines as planned, with the timeline unchanged—targeting production readiness by late October and batch delivery by mid-November. Raw material prices were generally stable during the holiday, with phosphorus-based feedstock remaining at post-pullback lows, bamboo-based feedstock prices stable, and coconut shell carbon holding at pre-holiday levels. On the battery cell side, the September-October peak season delivery pace continued, and the direction of grid connection for energy storage projects before year-end was clear. Mainstream product prices remained around 0.6 Yuan/Wh, with no new price adjustments.

Recycling:

On the raw material side, lithium carbonate prices opened lower and then rebounded on the first trading day after the holiday. The spot price center edged up slightly from pre-holiday levels and initially stabilized above 120,000 yuan/mt. Nickel sulphate prices extended their slight decline, while cobalt sulphate prices continued to fall. Today, looking at ternary/LCO and LFP material types separately, on the LFP hydrometallurgy side: taking LFP electrode black mass as an example, current LFP electrode black mass prices are 5,800-6,250 yuan per % lithium, up slightly by 50 yuan per % lithium from pre-holiday levels—downstream restocking demand resumed after the holiday, and inquiry activity clearly recovered compared with pre-holiday levels, but overall market participants were still mainly waiting to see how October production schedules materialize, and actual transactions had yet to pick up significantly. Meanwhile, current LFP battery black mass prices are 5,050-5,450 yuan per % lithium, with the price spread versus electrode black mass remaining at a high level of around 750-800 yuan per % lithium. On the ternary and LCO side, nickel and cobalt payables for ternary electrode black mass were around 72.5-74%, holding steady on the first day after the holiday, while transactions for some high-nickel 8-series and 9-series ternary electrode black mass remained at around 76-77%. For LCO electrode black mass, cobalt and lithium payables were 69.5-71.5%, and for LCO battery black mass, cobalt and lithium payables were 66-69%. At present, secondary cobalt sulphate prices continued to decline, and downstream LCO hydrometallurgy producers remained very cautious in purchasing, with sluggish market transactions. Current prices remained below those on the ternary side.

Downstream and end-users:

This week, overseas battery cabins increasingly entered negotiations for next year's projects. In Europe, deliveries are being made in the form of large battery cells, because the corresponding system prices for large cells are expected to be 5%-10% lower than conventional 5MWh solutions, and as a result, some producers can actually be seen showing a downward price trend. On September 17, the winning candidates were announced for the procurement of 297MW/1188MWh LFP battery energy storage system equipment for the Weichang Deyu grid-side standalone ESS demonstration project. Details are as follows: First candidate: Tianjin Ruiyuan Electric Co., Ltd., unit price: 0.5215 Yuan/Wh; Second candidate: Sungrow Power Supply Co., Ltd., unit price: 0.5111 Yuan/Wh; Third candidate: Shenzhen Clou Electronics Co., Ltd., unit price: 0.52 Yuan/Wh

News:    

[CATL and Seres sign long-term strategic cooperation agreement] On October 10, CATL and Seres Group signed a long-term strategic cooperation agreement in Chongqing. Since the AITO brand was founded, all of its models have been equipped with CATL batteries, and cumulative deliveries have surpassed 1.2 million units to date. Taking this as a new starting point, AITO will continue to equip all of its models with CATL batteries over the long term, and the two parties will comprehensively deepen strategic collaboration across three core areas: Expanding "factory-within-a-factory" capacity: accelerating the construction of Phase II of the Seres Super Factory "factory-within-a-factory" project, with Phase II planned annual capacity of 10-12 GWh, bringing total annual capacity of Phases I and II to over 20 GWh upon completion. Building a supercharging ecosystem: cooperating on supercharging networks and battery services to create a service system covering the full life cycle and upgrade the owner travel experience. Accelerating global expansion: jointly exploring overseas markets such as Europe, the Middle East, and Central Asia, bringing quality products and services to the world, and setting a new benchmark for new energy smart manufacturing going global. (Jin10 Data APP)

[Ministry of Finance: NEV VAT export rebate rate to be reduced from 13% to 9%] The Ministry of Finance issued an announcement on adjusting export rebate policies for certain products. From April 1, 2027, the VAT export rebate rate for NEVs will be reduced from 13% to 9%. From April 1, 2027, VAT export rebates for products such as e-cigarette devices will be cancelled. For the above products that are subject to consumption tax, the export consumption tax policy will not be adjusted, and the consumption tax refund (exemption) policy will continue to apply. (Ministry of Finance)

[January-September: China's NEV production and sales both exceeded 12 million units, up 11% and 11.1% YoY respectively] The latest data released by CAAM on the 12th showed that in the first nine months of this year, China's NEV market achieved double-digit growth in both production and sales, with particularly strong performance in overseas markets. The latest data showed that from January to September this year, China's NEV production and sales reached 12.483 million and 12.472 million units respectively, up 11% and 11.1% YoY respectively. NEV sales accounted for 53.6% of total new vehicle sales. In the international market, NEV exports reached 4.006 million units from January to September, up 1.3 times YoY. (CCTV News)

[MOFCOM spokesperson answers reporters' questions on China-EU consensus on hybrid and electric vehicle consultations] Q: Recently, China and the EU held in-depth discussions on hybrid and electric vehicle trade under the trade and investment consultation mechanism, avoiding an escalation of the situation. Some foreign media have speculated about details such as the quantity of hybrid vehicle trade arrangements. What is China's comment? A: Regarding hybrid vehicles, the two sides emphasized and confirmed three basic principles. First, respect the facts. According to Eurostat data, the EU imported 107,000 hybrid vehicles from China in 2024 and 302,000 in 2025. The two sides reached an upward arrangement on the basis of 2025, ensuring export space and stable growth for Chinese enterprises, and accommodating the reasonable concerns of both industries based on reality. Second, non-discrimination. No measures will specifically target Chinese products, nor will Chinese enterprises be treated in a discriminatory manner. The quota obtained by China will not be lower than that of any other source of imports to the EU. Third, compliance. The two sides confirmed that the trade arrangements should comply with WTO rules. China reserves all rights, including resorting to dispute settlement and requesting trade compensation, within the WTO framework. These three basic principles run throughout and serve as a solid foundation for safeguarding the legitimate rights and interests of Chinese enterprises. (Jin10 Data APP)

Data source statement: Except for publicly available information, all other data are processed and produced 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