[SMM Cobalt Lithium Morning Meeting Minutes] Ternary material prices were stable, cathode manufacturing costs increased slightly

**Lithium Ore:**

**Mica prices were stable this week.** The mica market was relatively flat recently. As the Spring Festival is approaching, smelters in Jiangxi have reduced production significantly. As lithium carbonate prices have gradually stabilized and even had occasional declines, some companies have started to adopt a firm pricing attitude. Some mining companies even have a certain psychology for price hikes. But currently the weakness at both ends of the market and the low purchasing enthusiasm of downstream companies have led to lower acceptance of high prices. Therefore, the price divergence between upstream and downstream is quite large, and the market remains stable for the time being. CIF spodumene prices remained stable before the festival. The market sentiment was flat. Domestic lithium salt companies have also started the holiday. There were fewer procurement activities and price negotiations overall. Currently domestic spodumene inventory levels are still adequate, and the spodumene inventories at major lithium salt plants are still high. As Australian mines this year reduced non-recurring capital development costs, if lithium salt prices decline afterwards, lithium ore prices still have some room to decline.

**Lithium Carbonate:**

**As the last working day before the festival approached, domestic logistics and transportation gradually stopped operations, and most lithium salt companies reported that business has basically stopped. Most of the downstream cathode material and other companies have also completed lithium carbonate stocking, and few have plans to procure this week. Market transactions are light, and lithium carbonate spot prices remain basically stable.**

**Lithium Hydroxide:**

**Lithium hydroxide prices increased this week.** Judging from market changes, currently the Spring Festival is approaching, and logistics will gradually stop operating. Some upstream manufacturers have begun to enter the production reduction rhythm during the Spring Festival holiday, but as some downstream manufacturers have pre-holiday production activities, and their own raw materials and subsequent customer supply have not completely matched, they are still in urgent replenishment before the festival, resulting in a decrease in low-priced circulating supply in the market and a slight increase in transaction prices.

**Electrolytic Cobalt:**

**This week, electrolytic cobalt prices operated stably temporarily.** On the supply side, production remained stable. On the demand side, as the Spring Festival is approaching, due to transportation issues, market inquiries and transactions turned light this week. It is expected that next week, affected by the Spring Festival, spot prices will remain stable and market prices will operate stably.

**Intermediates:**

**This week, cobalt intermediate product prices operated stably temporarily.** The supply remained stable on the supply side. On the demand side, market demand slid this week as previous stockpiling was basically completed. From the market perspective, market inquiries and transactions were low this week, so spot prices remained stagnant under the circumstances of having offers but no bids. It is expected that as the year end approaches, market trading sentiment may become calm, and spot prices may operate stably.

**Cobalt Salts (Cobalt Sulfate and Cobalt Chloride):**

**Cobalt salt prices also operated stably temporarily this week.** On the supply side, smelters had some production reduction behaviors due to the upcoming Spring Festival holiday and weakening market demand, leading to a decrease in supply. On the demand side, new orders slid as previous stockpiling was basically completed, and market inquiries and transactions were relatively bleak. As market trading sentiment was weak, prices also operated stably temporarily. It is expected that afterwards, although the market is in a situation of weak supply and demand, as the holiday is approaching, market trading sentiment may weaken further, and spot prices may remain stable.

**Cobalt Salt (Cobalt Tetroxide):**

**Prices of cobalt tetroxide also operated stably temporarily this week.** On the supply side, smelters maintained high operating rates due to delivery orders. On the demand side, downstream stockpiling was basically completed in previous periods, and procurement willingness was weak this week with declining demand. In general market conditions, as market activity was low, the market operated stably temporarily this week. It is expected that next week, as the Spring Festival holiday is approaching, market fluctuations may be small, and prices may remain stable.

**Nickel Sulfate:**

**This week, nickel sulfate prices rose slightly. Nodes with less sellable spot supply saw some procurement demand for nickel sulfate from some ternary precursor companies, thus pushing nickel sulfate prices higher.** With the approach of the February Spring Festival holiday, expectations of warehouse stocking and production reduction by salt plants led downstream players to have stronger bullish sentiment towards March. As some salt plants’ raw material supply is not completely determined for the first quarter, they were quite prudent about signing March orders. This sentiment further drove the increase of current nickel sulfate prices. On the cost side, current MHP spot supply in the market is not ample. MHP bids this week were maintained at RMB 76-78, with transaction prices maintained at around RMB 76. Cost support is also relatively strong. In terms of future expectations, it will be difficult to ease the current tight spot situation before the upcoming festival. As downstream players struggle to procure goods, it is expected that transactions will be weak in the near term, and prices are likely to remain stable at current high levels.

**Ternary Precursor:**

**Prices of ternary precursor were stable this week.** On the cost side, nickel prices rebounded slightly due to tight low-priced spot supply. There was an intention among precursor manufacturers to raise quotes slightly, but downstream resistance to price hikes remained strong, and it was difficult for transactions to increase. On the demand side, domestic cathode production exceeded expectations. Some companies saw better demand for precursors as reduced production was resumed in addition to some projects stocking up earlier. Overseas, shipping factors led to some precursor companies raising collection. In February, overall cathode company demand will decline due to the Spring Festival. On the supply side, precursor companies produced on demand in January. Looking ahead, with weaker demand in February, room for a nickel price rebound will be limited, and ternary precursor prices may remain stable.

**Ternary Materials:**

**Prices of ternary materials were also stable this week.** On the cost side, lithium prices rebounded slightly, and cathode manufacturing costs increased slightly. In the consumer electronics and small power markets, stockpiling by downstream terminal companies led to better February production expectations at some cathode material companies. In the power market, on the supply side, ternary cathode companies built some inventory in January for the February Spring Festival holiday. Whether ternary cathode material companies take leave in February will be closely related to downstream orders. Some companies with relatively good orders may not have holidays, but the overall production reduction trend is obvious. On the demand side, cell companies’ demand for cathodes will weaken during the Spring Festival holiday in February. It is expected that ternary material prices will likely continue to remain stable going forward.

**Lithium Iron Phosphate:**

**Early this week, lithium iron phosphate prices were stable. Affected by the Spring Festival holiday, market term cargoes did not see transactions, neither did spot cargoes.** On the cost side, prices of the core raw material lithium carbonate were stable, and lithium iron material production costs remained stable. On the raw material side, lithium iron phosphate companies shifted to holiday operation mode - arranging production shifts during the Spring Festival, while arranging holiday leave for some personnel. On the demand side, overall demand was stable. Ahead of the Spring Festival, procurement demand for lithium iron phosphate maintained at required collection volume. It is estimated that lithium iron phosphate prices may remain stable afterward.

**Lithium Cobaltate:**

**Lithium cobaltate prices were stable this week. On the cost side, cobalt tetroxide prices were stable, lithium carbonate rebounded slightly, leading to a slight rebound in lithium cobaltate manufacturing costs.** Notebook computer shipments on a year-over-year basis are forecast to recover in 2024 Q4, with the global decline in smartphone shipments expected to narrow. There has not been an obvious increase in e-cigarettes currently. On the supply side, some companies arranged production for Spring Festival stockpiling, resulting in output exceeding sales. For the outlook, lithium cobalt prices may operate stably, and lithium cobaltate prices may operate weakly stably.

**Anode:**

**Anode material prices operated weakly this week.** On the cost side, petroleum coke prices remained stable temporarily, and are expected to decline afterwards as downstream demand decreases. Oil-based needle coke and calcined coke prices remain depressed. Currently the supply and demand of needle coke are both weak. Needle coke plants have mostly shifted to producing petroleum coke or calcining green coke into calcined coke. Prices are expected to remain weakly stable going forward. Prices of outsourced graphitization remain unchanged. Currently, some newly built integrated anode plants chose to release graphitization capacity first, competing with independent graphitization plants for outsourced graphitization orders. Independent custom graphitization plants are facing fierce competition and scarce demand, and have been forced to cut or suspend production. They continue to face the risk of shutdown. On the demand side, current downstream demand is limited, procurement is cautious, overall market transactions are light, and sales staff at anode plants have mostly been on holiday already. Affected by the Spring Festival holiday in February, cell plant orders will further