[SMM Cobalt and Lithium Morning Meeting Summary] Refined Cobalt Market Well-Supplied with Ample Circulating Volume

Lithium Ore:

For spodumene, prices remained basically flat WoW this week. Overseas lithium ore prices hovered around $900/mt, with sentiment to stand firm on quotes remaining strong. However, the high prices have led to significant losses, weakening purchase willingness from the demand side amid the downward trend in lithium carbonate prices. Overall market transactions were mediocre. In the domestic market, traders and lithium chemical plants actively inquired and purchased to maintain production rhythm after resuming operations, leading to a slight improvement in transaction activity compared to earlier periods. Additionally, a recent transaction for overseas lithium ore at CIF SC6 $875/mt showed a slight decline from the previous price center. Considering the current price suppression sentiment from the demand side, spodumene concentrate prices are expected to face downward pressure in the short term.
This week, lepidolite prices saw a slight increase. Recently, some suppliers in Jiangxi conducted auctions and shipments, with a clear sentiment to stand firm on quotes, pushing transaction prices to higher levels. Other small and medium-sized suppliers also raised their quotations under this influence. On the demand side, there was strong restocking willingness after resuming operations, but the ability to accept higher ore prices was limited due to the declining lithium carbonate prices. Most buyers adopted a wait-and-see attitude toward the higher quotations from small and medium-sized miners. Given the current market demand for ore, lepidolite prices are likely to continue rising in the short term.

Lithium Carbonate:

This week, spot lithium carbonate prices continued to decline, with a drop of around 800 yuan/mt. From the current market transaction perspective, downstream material plants, having stocked up sufficiently before the Chinese New Year, showed weak procurement willingness after the holiday. Only limited just-in-time procurement transactions occurred, with most adopting a cautious and observant attitude. Upstream lithium chemical plants maintained a strong sentiment to stand firm on quotes for 2025 long-term contract discount coefficients and spot lithium carbonate. Overall, the spot lithium carbonate market saw sluggish transactions, with prices continuing to decline. On the supply side, some upstream lithium chemical plants have completed production line maintenance, gradually restoring production to normal levels. Downstream demand remained consistent with pre-holiday production rhythms, but cathode material production continued to decrease in February, following January's trend during the off-season. Overall, significant inventory buildup is expected for domestic lithium carbonate in February. Spot lithium carbonate prices are anticipated to have some downside room, accompanied by sideways movement.

Lithium Hydroxide:

This week, lithium hydroxide prices were basically flat WoW. On the production side, some lithium chemical smelters are still undergoing maintenance and are expected to resume production later in February. Additionally, according to public information, some production lines at a major lithium chemical smelter will switch from lithium hydroxide to lithium carbonate production. In the market, most ternary cathode material plants had sufficient stockpiles before the holiday, resulting in limited spot order demand at present, with quotations remaining stable. Although some upstream enterprises are undergoing maintenance or transformation, they continued shipments due to large inventory levels, maintaining a strong sentiment to stand firm on quotes. However, given the limited downstream demand, transaction prices have limited upward potential. Currently, buyers and sellers are mostly negotiating prices for new orders, with no large-scale transactions observed.
In the short term, lithium hydroxide prices are expected to fluctuate rangebound.

Refined Cobalt:

This week, refined cobalt prices declined slightly. On the supply side, the market remains well-stocked, with ample circulating volumes. On the demand side, downstream sectors are slowly resuming operations, with mediocre inquiry and activity levels. Overall, the market has settled into an oversupply pattern, with spot prices continuing to decline. Next week, the overall supply-demand pattern is unlikely to change, and refined cobalt prices are expected to face further downward pressure.

Intermediate Products:

This week, cobalt intermediate product prices remained weak. On the supply side, port inventories are sufficient, with ample circulating spot volumes. On the demand side, downstream cobalt smelters are slowly resuming operations after the holiday, resulting in limited demand for cobalt intermediate products. Overall, the oversupply pattern persisted during the week, leading to slight declines in spot prices. Looking ahead, the overall market supply-demand pattern is unlikely to change, and spot prices are expected to continue fluctuating downward.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

This week, cobalt sulphate prices remained stable, while cobalt chloride prices declined slightly. On the supply side, cobalt salt smelters maintained low operating rates. On the demand side, market demand was limited to basic procurement, with overall performance remaining weak and transactions subdued. Due to the lack of active market trading, prices continued to fluctuate downward. Next week, the market supply-demand situation is unlikely to see substantial changes, and spot prices are expected to face slight downward pressure.

Cobalt Salts (Co3O4):

This week, Co3O4 prices remained basically stable. On the supply side, smelters maintained good operating conditions. On the demand side, post-holiday market sentiment was generally cautious, with most activity focused on fulfilling existing orders, resulting in weak spot demand. Overall, as downstream enterprises had completed restocking before the holiday, the market remained relatively stable this week, with no significant fluctuations in spot prices. Looking ahead to next week, as cobalt salt raw material prices continue to decline, cost support for Co3O4 may gradually weaken, potentially leading to slight downward pressure on spot prices.

Nickel Sulphate:

As of this Thursday, the SMM battery-grade nickel sulphate index price stood at 26,598 yuan/mt, with the quotation range for battery-grade nickel sulphate between 26,400 and 27,080 yuan/mt, and the average price remained flat WoW. On the demand side, most ternary cathode precursor plants had completed stocking nickel salt raw materials for February before the Chinese New Year. Although some precursor plants still had minor restocking needs, market activity was low this week, with inquiries dominating and overall transactions subdued. On the supply side, some nickel salt smelters have not resumed production due to losses. As production remains unprofitable, nickel salt smelters showed no signs of price concessions, maintaining a strong sentiment to stand firm on quotes. Given that next week marks a key period for nickel salt procurement, nickel salt smelters are expected to maintain firm quotations. Meanwhile, there is still some restocking demand for February, and raw material procurement for March will gradually begin next week. Therefore, nickel sulphate prices are expected to rise next week.

Ternary Cathode Precursors:

This week, prices for 5-series consumer-grade, 6-series consumer-grade, and 8-series power-grade ternary cathode precursors remained stable. In terms of raw material costs, prices for nickel sulphate, cobalt sulphate, and manganese sulphate remained stable, keeping ternary cathode precursor prices steady. On the demand side, due to the off-season and fewer calendar days, material plants reduced production plans, leading to overall weak demand for ternary cathode precursors. On the supply side, precursor plants resumed operations after the holiday with low operating rates, resulting in subdued market transactions this week. Some precursor plants have already signed long-term contracts for this year, but others have yet to reach agreements due to losses, with negotiations between buyers and sellers ongoing. Looking ahead to next week, considering the sentiment to stand firm on quotes among precursor plants facing losses and the expected rise in nickel salt prices, precursor prices are likely to increase to varying degrees.

Ternary Cathode Materials:

This week, the ternary cathode material market showed a divergent trend. Prices and costs for 5-series and 6-series ternary cathode materials declined to varying degrees due to falling lithium carbonate prices. As a key raw material for ternary cathode materials, lithium carbonate price fluctuations significantly impacted related product costs. Meanwhile, costs for 8-series ternary cathode materials remained stable, as lithium hydroxide and sulphate prices showed no significant changes this week, keeping the cost structure of 8-series ternary cathode materials relatively stable.
In terms of production and supply, the overall production schedule of the ternary cathode material industry in February was still affected by the off-season at the beginning of the year in both the terminal power and consumer sectors, with order volumes relatively mediocre compared to previous months. Some producers, mainly supplying ternary materials to overseas clients, experienced relatively smaller declines in orders, primarily due to the resilience of overseas demand for ternary materials, especially in certain high-end application fields. However, unlike the domestic trend of demand recovery and growth after March, the growth momentum of overseas demand in H1 was relatively sluggish compared to domestic demand. From an industry perspective, industry concentration further increased, with mid-to-lower-tier enterprises experiencing more significant order reductions, intensifying market competition and concentrating resources and orders among top-tier enterprises.

LFP:

This week, LFP market prices continued the downward trend from last week, mainly influenced by the ongoing decline in lithium carbonate prices, with an overall price drop of about 200 yuan/mt. Lithium carbonate prices showed a clear downward trend this week, decreasing by approximately 850 yuan/mt. Processing fees remained unchanged since the last adjustment. Regarding lithium carbonate discount agreements, some material manufacturers and downstream battery cell manufacturers signed long-term agreements that continued the low discount levels of 2024, leading to an unoptimistic profitability outlook for material manufacturers. On the supply side, the overall operating conditions of LFP material manufacturers were relatively stable in early February. Some small and medium-sized LFP manufacturers resumed production after the Lantern Festival, while top-tier material manufacturers maintained stable production, with no significant changes in the overall market. However, on the demand side, downstream battery cell manufacturers slightly reduced their procurement volumes in February, causing minor adjustments in the supply chain structure and leading to an increase in overall inventory for February.

Iron Phosphate:

This week, iron phosphate prices remained relatively stable, with no significant fluctuations in the prices of raw materials such as phosphorus sources and iron sources. Due to sufficient market supply, some enterprises were willing to negotiate prices to increase shipments. However, other enterprises, constrained by raw material costs and cash flow, maintained higher prices, resulting in a polarized market price trend. In February, due to factors such as maintenance and production cuts by some enterprises, production is expected to decline MoM compared to January.

LCO:

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 consumer electronics demand led to a decline in LCO orders, resulting in reduced production schedules. Meanwhile, the weakening prices of battery-grade lithium carbonate raw materials increased the resistance to price recovery in the LCO spot market.

Anode:

This week, apart from slight price increases in some low-end artificial graphite materials, prices for other anode materials remained relatively stagnant. Cost side, influenced by adjustments in tax policies, low-sulphur petroleum coke prices remained high this week. Driven by the rise in low-sulphur petroleum coke prices and the previous low-level fluctuations in oil-based green needle coke prices, oil-based green needle coke prices saw a slight increase this week. As the anode sector gradually moves towards integrated production, the oversupply in the outsourced graphitisation market is unlikely to change in the short term, and graphitisation prices remained stable this week. Demand side, following the Chinese New Year, downstream demand weakened amid a sluggish market recovery. In summary, under the backdrop of persistently high theoretical costs, anode manufacturers showed a strong sentiment to stand firm on quotes. However, constrained by the still-weak downstream demand post-holiday, prices only saw slight increases in some areas this week. Anode material prices are expected to rise slightly in the future.

Separator: This week, lithium battery separator material prices remained stable.

Due to previous price wars and price suppression by battery cell manufacturers, separator material prices had fallen to low levels, prompting separator manufacturers to exhibit a sentiment to stand firm on quotes. In terms of supply and demand, the market recovery was slow after the Chinese New Year, with downstream demand still sluggish, leading to a decline in the operating rate of separator enterprises. Facing this weak supply and demand situation, downstream battery cell manufacturers ceased price suppression to ensure procurement volumes, resulting in stable separator prices this week. Looking ahead, with the gradual release of new capacity, the separator market may remain in an oversupply state. To compete for market orders, separator material enterprises may adopt price reduction strategies.

Electrolyte:

This week, electrolyte prices remained stable. On the supply side, after the Chinese New Year holiday, market demand remained weak. LiPF6 production was order-based, and electrolyte manufacturers delivered goods based on orders, with limited transactions and stable prices. On the demand side, battery cell manufacturers' demand for electrolytes remained low, with order-based procurement. Cost side, LiPF6 and solvent prices remained stable, while additive prices slightly increased. Currently, overall electrolyte prices are mainly influenced by LiPF6 prices. However, due to price suppression by battery cell manufacturers, electrolyte prices remained stable. The prices of ternary power battery electrolyte ranged from 21,100 to 29,550 yuan/mt, while LFP battery electrolyte prices ranged from 16,800 to 25,550 yuan/mt. In the short term, fluctuations in costs are expected to cause electrolyte prices to oscillate within a certain range.

Sodium-Ion Battery:

This week, the sodium-ion battery market remained sluggish. Due to fluctuations in raw material prices for nickel, manganese, and iron, there was no room for cost reductions in layered oxide. However, with the gradual release of new capacity in the NFPP route, its per-ton cost has decreased compared to before, and future prices are expected to have significant room for reduction. In the sodium-ion battery structure, the capacity configuration of anodes is still less developed compared to cathodes and battery cells, showing clear potential and room for growth. Overall, despite the mediocre market performance, the sodium-ion battery industry still holds promising growth opportunities and adjustment potential with the optimization of certain route costs and further technological advancements.

Recycling:

This week, prices in the recycled scrap market remained stable overall. On the supply side, some hydrometallurgical plants gradually resumed operations, but many small and medium-sized crushing plants and traders were expected to return from the holiday around the Lantern Festival, resulting in limited scrap circulation and sluggish transactions in the market. On the demand side, prices for nickel sulphate and cobalt sulphate salts remained stable, while lithium carbonate prices saw a slight decline. After the holiday, most crushing plants preferred to maintain high prices, while some hydrometallurgical plants, due to depleted inventories, had to procure small amounts of black mass at high prices. However, transaction volumes for these were not high, and most hydrometallurgical plants remained in a wait-and-see mode. In the short term, black mass prices are expected to remain stable in line with nickel, cobalt, and lithium salt prices. Due to weak supply and demand, the black mass coefficient is also expected to remain stable temporarily.

Downstream and Terminal:

In early February, DC-side prices slightly declined, with the average price of 5MWh DC-side battery cabins at 0.43 yuan/Wh, and 3.44/3.77MWh DC-side battery cabins at 0.438 yuan/Wh. Influenced by the "Notice on Deepening the Market-Oriented Reform of New Energy On-Grid Tariffs to Promote High-Quality Development of New Energy" issued by the NDRC and the National Energy Administration on January 27, DC-side battery cabin prices faced resistance, and short-term price fluctuations are expected.
This week, the bid-winning candidates for the 150MW/300MWh standalone ESS power station project (Phase I) EPC general contracting project (second tender) in Guzhen Town, Zhongshan City, were announced. China Construction Third Engineering Bureau First Construction Engineering Co., Ltd. was listed as the first candidate with a bid price of 258.04 million yuan, equivalent to a unit price of 1.29 yuan/Wh. The tender scale was 100MW/200MWh. The project adopts the EPC general contracting model, requiring the winning bidder to undertake all tasks related to the construction of the ESS system, including survey and design, equipment and material procurement and supervision, site preparation, grid connection, civil and installation works, system integration, commissioning, trial operation, grid connection testing, production handover acceptance, and final acceptance by the client and grid and energy authorities.
According to the announced bid-winning candidates, the second candidate was Guangxi Construction Engineering Group Second Installation Construction Co., Ltd., with a bid price of 2.799 billion yuan, equivalent to a unit price of 1.4 yuan/Wh.

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SMM New Energy Research Team

Cong Wang 021-51666838

Rui Ma 021-51595780

Ziya Lin 86-2151666902

Ye Yuan 021-51595792

Disheng Feng 021-51666714

Ying Xu 021-51666707

Yanlin Lü 021-20707875

Yujun Liu 021-20707895

Zhicheng Zhou 021-51666711