SHANGHAI, Aug 26 (SMM) – Improved trades extended growth in cobalt prices last week as downstream consumers replenished their inventories of cobalt salts. However, the inclination to destock across suppliers continued to weigh on lithium prices.
Resumption in operating rates across major battery producers in China was limited in August as downstream automakers that use ternary batteries have yet to recover from the negative impact caused by subsidy cuts. Higher prices of raw materials nickel and cobalt also depressed operation at battery producers and kept downstream consumers to deplete their in-plant stocks. An SMM survey found that the run-rates across ternary batteries mills averaged around 40% in the month to August 23.
Mass production of ternary batteries with high nickel content also slowed. SMM expects a rebound in the battery operating rates from mid-September in light of a usual installation rush at the end of a year.
The rates across lithium iron phosphate (LFP) battery producers, however, stood higher given the advantages around costs and performance in LFP batteries. Major producers of LFP batteries planned to raise their production targets for the second half of the year.
China’s authorities announced last week that they would support the switch of buses and taxis to new energy vehicles in more cities and setting up pilot zones where petrol or diesel vehicles are banned, in an effort to promote a full fossil fuel phase-out. This boosted the demand outlook for LFP batteries, which are widely applied in electric buses and special vehicles.
Hainan, the first province in China to come up with a timetable for fossil-fuel vehicles ban, will stop selling such vehicles by 2030, according to a statement released in March.
Last week, prices of refined cobalt and cobalt salts extended gains from the previous week amid improved trades and tight spot supply. Downstream consumers replenished their inventories of refined cobalt, and battery materials mills began a new round of restocking for cobalt salts. Unstable speculative demand, however, kept the outlook mixed for short-term prices.
SMM assessed traded prices of refined cobalt climbed 5,000 yuan/mt from a week ago, to stand at 247,000-257,000 yuan/mt in the week to Friday August 23. Prices of cobalt hydroxide rose $1.1/lb on the week to $9-9.5/lb, with quotes standing above $9.5/lb.
Traded prices of cobalt sulphate came in at 46,000-51,000 yuan/mt in the week to Friday August 23, up 4,000 yuan/mt on the week, with offers exceeding 50,000 yuan/mt. Trades of cobalt chloride occurred at 50,000-56,000 yuan/mt, up 4,500 yuan/mt, compared with quotes of around 60,000 yuan/mt. Prices of nickel sulphate grew an average 625 yuan/mt on the week to 27,000-29,000 yuan/mt.
Expectation of stable demand for lithium cobalt oxide (LCO) drove up offers of cobalt (II, III) oxide, the feedstock to produce LCO, to 190,000 yuan/mt. But actual trades were limited. SMM assessed that trades occurred at 175,000-185,000 yuan/mt as of Friday August 23, up 14,500 yuan/mt from a week ago.
Prices of ternary precursor continued to grow on improved demand from the digital market and higher prices of raw materials cobalt and nickel. Consumption from the downstream power battery market remained sluggish.
In the week to Friday August 23, prices of NCM523 rose 6,000 yuan/mt on the week, to 84,000-88,000 yuan/mt, with prices of NCM622 climbing 4,000 yuan/mt, standing at 91,000-94,000 yuan/mt.
Producers of lithium salts were keen to destock at lower prices on inventory pressure and higher costs of raw materials. Prices will face further downward pressure as the market remained well-supplied despite production cuts and slower commissioning of new capacity.
SMM assessed prices of battery-grade lithium carbonate at 61,500-64,500 yuan/mt, down an average 500 yuan/mt on the week. This dragged on prices of industrial-grade lithium carbonate despite stable downstream demand from the digital market. SMM assessment showed that prices of industrial-grade lithium carbonate lost an average 3,000 yuan/mt on the week to 53,000-56,000 yuan/mt.
Last week, prices of battery-grade lithium hydroxide extended their declines on domestic slower-than-expected development of high-nickel ternary battery capacity, while stable overseas demand underpinned prices.
As of Friday August 23, prices of battery-grade lithium hydroxide (coarse particle) shrank an average 500 yuan/mt on the week, to stand at 71,500-74,500 yuan/mt, SMM assessed.
Prices of LCO, used to produce 4.35V batteries, rose by an average 3,000 yuan/mt on the week, to 198,000-208,000 yuan/mt as of Friday August 23. Further upward momentum is expected in prices on anticipations of firm demand.
Prices of ternary materials grew slightly last week as higher prices of precursor offset declines in prices of lithium salts. Precursor and lithium salts are feedstock to produce ternary materials.
SMM assessed that prices of both NCM523 and NCM 622 materials grew 2,000 yuan/mt on the week to 130,000-138,000 yuan/mt and 147,000-154,000 yuan/mt, respectively.
Prices of LFP used in power batteries barely changed last week, at 46,000-49,000 yuan/mt, SMM assessed. There were signs that downstream LFP battery producers may ramp up operation in the weeks ahead.
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 in September.
!["Lithium Battery Scrap Procurement Dips in August, LFP and LCO Prices Decline [SMM Analysis]"](https://imgqn.smm.cn/usercenter/aezhG20251217171650.jpg)
