SHANGHAI, Sep 2 (SMM) – Optimistic outlook and reviving demand from the digital market are likely to further grow prices of cobalt-related products next week. Prices of lithium products showed signs of slower declines last week, and prices may stop falling in the weeks ahead as inventories at lithium salt smelters stabilise and pessimism around spodumene supply surplus eases.
Recovery at major power battery mills in China remained slow as demand from the new energy market failed to pick up. Overall operating rates across domestic power battery makers stood at around 40%.
With cost pressure at automakers spreading to battery producers, power battery prices continued to trend downwards during a period of market reshuffle. As of Friday August 30, prices of ternary battery systems stood at 0.85-0.9 yuan/Wh and prices of lithium iron phosphate (LFP) batteries at 0.75 yuan/Wh, down 15% and 16.7%, respectively, from the start of August.
China's central government on Tuesday August 27 unveiled a slew of measures to help boost domestic consumption, including possible removal of restrictions on car purchases. While this is expected to squeeze demand for new energy vehicles, measures also highlighted the switching of fuel-powered special vehicles to electric ones. SMM expects more detailed support measures in the coming months.
In the consumer battery market, demand improved since mid-August as a traditional high season set in. This was especially the case for lithium cobalt oxide (LCO) batteries and other battery types used in power tools. Consumption will likely receive a boost from the 5G sector in 2020 as China advances the construction of 5G base stations.
Last week, prices of refined cobalt extended gains from the previous week as bullish outlook drove downstream consumers to stockpile. Major producers ramped up production to meet export demand as overseas prices of cobalt outperformed domestic prices. SMM expects growing exports to narrow the spread between domestic, overseas prices of refined cobalt.
As end-users demand from the digital market revived, psychological price levels for cobalt hydroxide across downstream smelters drew close to that of major sellers, which stood at $11/lb.
SMM assessed traded prices of refined cobalt climbed 5,000 yuan/mt from a week ago, to stand at 252,000-262,000 yuan/mt in the week to Friday August 30. Prices of cobalt hydroxide rose $0.5/lb on the week to $9.5-10/lb.
Trades of cobalt chloride improved significantly last week and inventories of cheap cargoes were cleared. This drove spot sellers to hike offers. However, transactions thinned in the cobalt sulphate market as downstream buyers finished restocking and demand from power batteries remained sluggish.
Prices of cobalt sulphate came in at 48,000-52,000 yuan/mt in the week to Friday August 30, up 1,500 yuan/mt on the week, with prices of cobalt chloride standing at 56,000-62,000 yuan/mt, up 6,000 yuan/mt. Prices of nickel sulphate grew an average 750 yuan/mt on the week to 27,500-30,000 yuan/mt.
Solid demand from lithium cobalt oxide (LCO) batteries continued to buoy prices of cobalt (II, III) oxide, the feedstock to produce LCO, with offers standing as high as 200,000 yuan/mt.
SMM assessed that trades of cobalt (II, III) oxide occurred at 185,000-195,000 yuan/mt as of Friday August 30, up 10,000 yuan/mt from a week ago.
Prices of ternary precursor moved higher with prices of raw materials cobalt and nickel. Major producers reported brisk trades.
In the week to Friday August 30, prices of NCM523 rose 3,500 yuan/mt on the week, to 87,000-92,000 yuan/mt, with prices of NCM622 climbing 2,500 yuan/mt, standing at 93,000-97,000 yuan/mt.
Declines in prices of lithium carbonate slowed last week as inventories across downstream material producers slipped. Prices may stem declines in the weeks ahead as the high season for consumer batteries sets in and encourages procurement of lithium salts.
SMM assessed prices of battery-grade lithium carbonate at 60,500-64,500 yuan/mt, down an average 500 yuan/mt on the week. Prices of industrial-grade lithium carbonate also lost an average 500 yuan/mt on the week to 53,000-55,000 yuan/mt.
Prices of lithium hydroxide may face further downward pressure as supplies kept growing while demand from domestic and overseas markets held steady.
As of Friday August 30, prices of battery-grade lithium hydroxide (coarse particle) shrank an average 500 yuan/mt on the week, to stand at 71,000-74,000 yuan/mt, SMM assessed.
Prices of LCO, used to produce 4.35V batteries, rose an average 2,000 yuan/mt on the week, to 200,000-210,000 yuan/mt as of Friday August 30. Greater orders at medium-sized and small producers in a high season for digital products accounted for the higher prices.
Prices of ternary materials grew on elevated costs of feedstock precursor and improved demand from the digital market. Consumption from the power battery sector resumed sluggishly.
SMM assessed that prices of both NCM523 and NCM 622 materials grew 1,000 yuan/mt on the week to 131,000-139,000 yuan/mt and 148,000-155,000 yuan/mt, respectively.
Prices of LFP used in power batteries barely changed last week as they already drew close to costs at producers. SMM assessed prices at 46,000-49,000 yuan/mt last week with limited downside room expected next week.
Prices for lithium manganese oxide (LMO) also held flat last week, standing at 29,000-34,000 yuan/mt for LMO used in high-energy-density lithium-ion batteries and at 44,000-46,000 yuan/mt for LMO used in motive batteries.
A traditional high season for consumer batteries is expected to bolster demand for LMO this month, but intensified competition in the market and falling prices of raw materials would cap any upward momentum in prices.
![[Lithium Battery: Wanrun New Energy Adjusts Repurchase Plan For 100,000-Ton Cathode Material Project]](https://imgqn.smm.cn/usercenter/JSjkr20251217171728.jpg)
