Post-holiday market muted, cobalt and lithium prices to increase

SHANGHAI, Feb 24 (SMM) – This is a roundup of post-CNY update on new energy. 

Cobalt

Output of tricobalt tetraoxide stood at 7,235 mt in metal content in January, up 2.6% month-on-month and 71.9% year-on-year.

Some tricobalt tetraoxide plants took holidays ranging from 7 to 12 days. Output in February is expected to fall 13.9% on the month but increase 61.2% on the year to 6,200 mt.

Lithium

China's lithium carbonate output stood at 12,480 mt in January, a month-on-month decrease of 15.1% and year-on-year increase of 21.3%.

China's demand for lithium carbonate stood at 20,727 mt in February, a month-on-month decrease of 0.5% and year-on-year increase of 137.41%. 41% of demand was contributed by ternary materials, 23% by LFP, 15% from LCO and 7.9% from LMO.

Precursor and cathode material

China produced 22,000 mt of LFP in January, up 13.1% from December. Most companies maintained high operating rates before the CNY, and a few manufacturers stopped production for maintenance, limited by logistics shutdown. Output of LFP is expected to decline slightly in February.

China produced 6,800 mt of LMO in January, down 7.1 from December. Most LMO companies started operation in late February and the output is expected to fall significantly from the previous month in February.

Price review

Cobalt intermediate products:

Spot prices of refined cobalt trended higher. Overseas prices rose sharply, and price spread appeared. Domestic quotations rose but trades thinned. Prices of cobalt intermediate products increased. Inventories are expected to be low in February and prices trended higher. Quotations in the spot market were few and smelters showed little buying interest as CNY was approaching.

Cobalt salt and nickel salt:

Cobalt-nickel salt prices trended higher. Downstream inquiries increased due to optimism over post-CNY prices, but actual purchases were limited. A few of cobalt sulphate standing at 77,000-78,000 yuan/mt was traded. Market became quiet before CNY. Downstream producers plan to make purchases after CNY, leaving trade muted.

Tricobalt tetraoxide:

Prices of tricobalt tetraoxide rose. Sellers either held back cargoes or raised quotation sharply, while downstream inquiries decreased. A few of cargoes was traded at 285,000-300,000 yuan/mt.

Lithium carbonate:

LCO prices stabilised. There were few transactions on the eve of the CNY. Downstream buyers are likely to restock cargoes for March-May at the end of February to March. Post-holiday prices are expected to increase sharply as lithium salt plants reduced and suspended production in a significantly way. SMM battery-grade lithium carbonate prices stood at 70,000-74,000 yuan/mt.

Lithium hydroxide:

Lithium hydroxide prices stabilised. Trades were none and mainstream plants maintained normal production, but sales stagnated. Post-CNY prices are expected to rise sharply amid rising trades and cost of raw materials. SMM battery-grade lithium hydroxide (coarse particles) prices stood at 56,000-59,000 yuan/mt.

LCO:

• LCO prices increased. The purchase inquiry form of Battery cell factory still offered procurement inquiries. A few of these orders were traded at 320,000 yuan/mt. LCO suppliers held prices firm and there were no quotations in the spot market.

Ternary precursor:

Prices of ternary precursor trended higher. Cobalt salt prices rose sharply and nickel salt prices were at high levels. Downstream plants focused on orders for February and March. Small and medium-scale plants have restocked cargoes and trades were muted. Only quotations followed the rise of cobalt salt prices.

Ternary materials:

Prices of ternary materials trended higher. Precursor and lithium salt prices rose and downstream producers have restocked in advance. Some battery plants have replenishment orders. Quotes of 5-series ternary materials rose to 155,000-160,000 yuan/mt and there were only a few trades. Inquiries for 6 and 8-series products weakened. Market saw no trades.

LFP:

LFP prices edged higher. On the motive power market side, prices of lithium carbonate rose while LFP plants increased their prices. Motive power products were quoted at above 45,000 yuan/mt while small and medium-sized factories were mostly above 42,000 yuan/mt. Most energy storage products were quoted at more than 36,000 yuan/mt, but some low-end products were still sold at around 35,000 yuan/mt.

Cathode:

Prices of cathode materials were unchanged. Needle coke prices remained unchanged. Downstream battery plants restocked in advance as logistics suspended during the CNY. There were no trades in the spot market and prices stabilised.

Diaphragm:

Diaphragm prices were flat. There were few quotations, and transactions declined. Diaphragm prices are expected to remain stable in the short term. In the long run, due to the scale effect and cost reduction by battery cell makers, diaphragm prices may go down. The production capacity of wet process coated diaphragm expanded further.

Electrolyte:

Prices of electrolyte were unchanged. Both lithium hexafluorophosphate and solvents have risen, and the quotations of electrolyte companies have increased. Post-holiday electrolyte prices are expected to rise as downstream battery companies have completed restocking, some major manufacturers have purchased orders for March in advance. SMM Electrolyte (for use in ternary motive power battery). Prices stood at 42,000-52,000 yuan/mt.