[SMM Analysis] LCO Prices Slightly Decline, with Demand Expected to Recover in the Future

》View SMM Cobalt and Lithium Product Prices, Data, and Market Analysis

》Subscribe to View Historical Spot Price Trends of SMM Cobalt and Lithium Products

Recently, the LCO industry has shown diverse development trends. In terms of prices, according to SMM analysis, LCO prices saw a slight decline this week, with the latest prices for 4.2V, 4.4V, and 4.5V LCO at 134,000 yuan/mt, 137,000 yuan/mt, and 149,000 yuan/mt, respectively. At year-end, weakened demand for consumer electronics led to a decline in LCO orders, resulting in reduced production schedules. Meanwhile, the weakening price of battery-grade lithium carbonate raw materials increased the resistance to a rebound in LCO spot market prices.

Strong Market Demand Growth

As an important cathode material for lithium batteries, LCO is widely used in the 3C consumer electronics sector due to its high working voltage, high tap density, and excellent electrochemical performance. In 2024, shipments of the four major lithium battery materials in China all achieved significant growth, with LCO production in the Chinese market reaching 88,000 mt, up 16% YoY. This growth trend reflects the strong demand for high-performance battery materials in the market.

Challenges and Substitution

Due to the limitations in the development and technological level of China's cobalt resources, the supply of raw materials for LCO faces certain uncertainties. Global cobalt ore production is highly concentrated in a few regions, with the DRC accounting for approximately 78% of global cobalt ore production. This concentrated supply model makes cobalt prices susceptible to factors such as geopolitical issues and mining restrictions, leading to significant price volatility.

The LCO industry has long faced the threat of substitution. For instance, LCO battery cells have seen a "de-cobalt" trend in recent years due to resource scarcity, high costs, environmental impact, and technological alternatives. At the same time, LFP has gradually increased its penetration in the low-end 3C market (e.g., power tools, two-wheelers) due to its low cost.

Future Outlook

With the continued growth of the global consumer electronics market and the rapid development of new-type consumer markets, the LCO industry is expected to maintain its growth momentum. In the future, companies are likely to focus more on technological innovation and industry chain upgrades to meet the demand for high-performance battery materials. Additionally, policy support will further drive the development of the LCO industry. For example, the national subsidy policy for consumer electronics introduced this year is expected to bring a new growth peak for the consumer electronics market, thereby boosting demand for LCO and strongly promoting the sustained progress of the LCO industry.

SMM New Energy Research Team

Cong Wang 021-51666838

Xiaodan Yu 021-20707870

Rui Ma 021-51595780 

Disheng Feng 021-51666714

Yujun Liu 021-20707895

Yanlin Lü 021-20707875

Zhicheng Zhou 021-51666711

Haohan Zhang 021-51666752

Zihan Wang 021-51666914

Xiaoxuan Ren 021-20707866

Jie Wang 021-51595902

Yang Xu 021-51666760

Lianting Yang 021-51595835

Yue Lei 021-20707845