[SMM Cobalt and Lithium Morning Meeting Summary] Market Recovery Remains Slow; Anode Downstream Demand Still Sluggish

Lithium Ore:

At the beginning of this week, spodumene prices showed relatively small changes WoW. Overseas mines maintained their sentiment to stand firm on quotes. Except for buyers with just-in-time procurement needs negotiating with some price suppression, most domestic demand-side players remained cautious toward high-priced lithium ore. Overall transaction activity was sluggish.
At the beginning of this week, lepidolite prices rose slightly WoW, mainly due to two high auction transaction prices last week that pushed up market levels. Coupled with the recent start of production, non-integrated lithium chemical plants showed strong willingness to restock, leading lepidolite concentrate suppliers to raise their quotations overall. In the short term, with no significant improvement in lithium concentrate supply, lepidolite prices are expected to rise slightly. Lithium Carbonate: At the beginning of this week, spot lithium carbonate prices continued to decline. Demand side, downstream material plants mainly restocked on a need-only basis. Although market transactions slightly rebounded, overall activity remained relatively weak. Supply side, most upstream lithium chemical plants completed maintenance and gradually resumed normal production, leading to a steady increase in lithium carbonate supply. While upstream lithium chemical plants continued to stand firm on quotes, their quotations decreased amid the current supply growth. Considering the actual supply-demand situation, February is expected to see a significant surplus, and spot lithium carbonate prices are likely to have further downside room, accompanied by sideways movement. Lithium Hydroxide: At the beginning of this week, lithium hydroxide prices remained flat WoW, with suppliers maintaining a firm stance on quotes, mostly above 70,000 yuan/mt. Demand side, large-scale procurement demand was scarce due to sufficient prior stockpiling, though some inquiries and negotiations occurred for future production schedules. Overall, spot order transactions were mediocre. Refined Cobalt: This week, refined cobalt prices dropped slightly. Supply side, market supply was abundant with ample circulating volumes. Demand side, downstream sectors were slowly resuming work, with inquiries and market activity showing mediocre performance. Overall, the market's oversupply pattern was established, and spot prices continued 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. Supply side, port inventories were sufficient, with ample spot availability. Demand side, post-holiday downstream cobalt smelters were slowly resuming operations, 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 fluctuate downward. Cobalt Salts (Cobalt Sulphate and Cobalt Chloride): This week, cobalt sulphate prices remained stable, while cobalt chloride prices declined slightly. Supply side, cobalt salt smelters maintained low operating rates. Demand side, market demand was limited to basic procurement, with overall performance sluggish and transactions relatively quiet. Due to the lack of active market trading, prices continued to fluctuate downward. Next week, the market's 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 stable. Supply side, smelters operated well. Demand side, post-holiday market sentiment was generally cautious, focusing on fulfilling existing orders, with spot demand remaining sluggish. Overall, as downstream enterprises completed restocking before the holiday, the market was relatively stable this week, with no significant price fluctuations. Looking ahead to next week, as cobalt salt raw material prices continue to decline, cost support for Co3O4 may weaken, and spot prices could face slight downward pressure. Nickel Sulphate: On February 17, the SMM battery-grade nickel sulphate index price was 26,598 yuan/mt, with a quotation range of 26,400-27,080 yuan/mt, and the average price remained unchanged from the previous day. Cost side, LME nickel prices fluctuated recently. Demand side, some precursor plants continued stockpiling for February inventories, while others planned to start purchasing nickel salts for March this week. Supply side, some nickel salt smelters had not resumed operations, and their quotations remained mostly unchanged WoW, with spot order transactions sluggish. Based on the sentiment to stand firm on quotes due to cost losses at smelters and the existing procurement demand, prices are expected to rise slightly in the near term. Ternary Cathode Precursor: This week, prices for 5-series consumer-grade, 6-series consumer-grade, and 8-series power-grade ternary cathode precursors remained stable. Raw material cost side, prices for nickel sulphate, cobalt sulphate, and manganese sulphate were stable, keeping precursor prices steady. Demand side, due to the off-season and fewer calendar days, production schedules at material plants declined, leading to overall weak demand for ternary cathode precursors. Supply side, precursor plants had low operating rates post-Chinese New Year, and market transactions were relatively quiet this week. Some precursor plants had signed long-term contracts for the year, while others were still negotiating due to losses, with buyers and sellers continuing to bargain. Looking ahead to next week, considering the sentiment to stand firm on quotes amid cost losses at precursor plants and the expected rise in nickel salt prices, precursor prices are likely to increase to varying degrees. Ternary Cathode Material: On Monday, prices and costs for 5-series and 6-series ternary cathode materials declined due to falling lithium carbonate prices, while 8-series ternary cathode material costs remained stable as lithium hydroxide and sulphate prices showed no significant fluctuations. Production and supply side, February's overall production schedule was affected by the off-season in end-use demand, resulting in mediocre order volumes. Some overseas customer orders declined less significantly due to strong demand resilience in high-end applications, but overall overseas demand growth in H1 was weaker than domestic demand. Market competition intensified, with industry concentration further increasing, and resources and orders concentrated among top-tier enterprises, while mid-to-lower-tier enterprises experienced significant order reductions. LFP: This week, LFP market prices continued last week's downward trend, mainly due to further declines in lithium carbonate prices, with an overall decrease of about 200 yuan/mt. Lithium carbonate prices showed a clear downward trend this week, dropping by approximately 850 yuan/mt. Processing fees remained unchanged since the last adjustment. Regarding lithium carbonate discount agreements, some material plants and downstream battery cell manufacturers extended the low-discount agreements from 2024, leading to an unoptimistic profitability outlook for material plants. Supply side, early February saw stable operations at LFP material plants overall, with some small-to-medium-sized plants resuming production after the Lantern Festival, while top-tier material plants maintained stable production. The overall market showed little change. However, demand side, downstream battery cell manufacturers slightly reduced February procurement volumes, causing minor adjustments in the supply chain structure and an overall increase in February inventories. Iron Phosphate: This week, iron phosphate prices remained relatively stable, with no significant fluctuations in raw material prices for phosphorus and iron sources. With sufficient market supply, some enterprises were willing to negotiate prices to increase shipments, while others maintained high prices due to raw material costs and cash flow constraints, leading to a polarized market trend. In February, production is expected to decline MoM compared to January due to maintenance and production cuts at some enterprises. LCO: This week, LCO prices declined slightly, 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. Weakening battery-grade lithium carbonate prices further pressured LCO spot market price recovery. However, policy support, such as national subsidy policies, is expected to drive new growth peaks in the consumer electronics market, boosting LCO demand and potentially leading to a demand recovery in the future. Anode: This week, except for slight price increases in some low-end artificial graphite materials, other anode material prices remained relatively stagnant. Cost side, low-sulphur petroleum coke prices remained high due to tax policy adjustments. The rise in low-sulphur petroleum coke prices, coupled with previously low fluctuations in oil-based green needle coke prices, led to slight increases in oil-based green needle coke prices this week. As the anode sector gradually moves toward integrated production, the oversupply in the outsourced graphitisation market is unlikely to change in the short term, with graphitisation prices remaining stable this week. Demand side, post-Chinese New Year, market recovery saw a decline in downstream demand. Overall, despite high theoretical costs, anode manufacturers showed strong sentiment to stand firm on quotes. However, constrained by 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 stand firm on quotes. Supply and demand side, post-Chinese New Year, market recovery was slow, with downstream demand still sluggish, leading to reduced operating rates at separator enterprises. Facing this weak supply-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 secure market orders, separator material enterprises may adopt price reduction strategies. Electrolyte: This week, electrolyte prices remained stable. Supply side, post-Chinese New Year, market demand remained weak, with LiPF6 produced on order and electrolyte manufacturers delivering goods based on orders, resulting in limited transactions and stable prices. Demand side, battery cell manufacturers' demand for electrolytes remained low, with goods picked up on order. Cost side, LiPF6 and solvent prices remained stable, while additive prices rose slightly. Currently, electrolyte prices are mainly influenced by LiPF6 prices. However, due to price suppression by battery cells, electrolyte prices remained stable. Prices for ternary power battery electrolyte ranged from 21,100-29,550 yuan/mt, while LFP battery electrolyte prices ranged from 16,800-25,550 yuan/mt. In the short term, cost fluctuations 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, suggesting significant room for future price reductions. In sodium-ion battery structures, anode capacity allocation remains less developed than cathodes and battery cells, indicating clear potential and room for growth. Overall, despite the market's mediocre performance, the sodium-ion battery industry still holds promising growth opportunities and adjustment potential as certain route costs are optimized and technologies mature further. Recycling: This week, scrap market prices rose slightly. Supply side, some hydrometallurgical plants gradually resumed production, but many small-to-medium-sized crushing plants and traders only returned from the Lantern Festival holiday, resulting in low scrap circulation and a relatively quiet trading atmosphere. Demand side, prices for nickel sulphate and cobalt sulphate remained stable, while lithium carbonate prices declined slightly. Post-holiday, most crushing plants preferred to maintain high prices, while some hydrometallurgical plants, facing depleted inventories, had to purchase small amounts of black mass at higher prices. However, such transactions were not significant, with most hydrometallurgical plants still observing the market. In the short term, black mass prices are expected to remain stable, following nickel, cobalt, and lithium salt prices. With weak supply and demand, black mass market volatility is expected to remain unchanged in the short term. Downstream and End-Use: In early February, DC-side prices declined slightly, with the average price for 5MWh DC-side battery cabins at 0.43 yuan/Wh, and for 3.44/3.77MWh DC-side battery cabins at 0.438 yuan/Wh. Affected 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 face resistance, and short-term price fluctuations are expected.This week, the announcement of the winning candidates for the EPC general contracting project (Phase I) of the 150MW/300MWh standalone ESS power station project in Guzhen Town, Zhongshan City (second bidding) was released. 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. The bidding scale for this round was 100MW/200MWh, and the winning unit price for China Construction Third Engineering Bureau First Construction Engineering Co., Ltd. was calculated at 1.29 yuan/Wh. The project adopts the EPC general contracting model, requiring the winning bidder to undertake all tasks related to the construction of the energy storage system, including survey and design, procurement and supervision of equipment and materials; site preparation, outgoing line works, civil and installation works, system integration, commissioning, trial operation, grid connection testing of the electrochemical ESS power station, production handover acceptance, and final acceptance; grid connection, fire design filing and review with the Ministry of Housing and Urban-Rural Development, and passing the acceptance inspections by the tenderer, power grid, and energy authorities.

According to the announcement of the winning candidates, the second candidate for the project 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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News:   

【In 2024, China's Imported Lithium Concentrates Reached 5.25 Million mt, Up 31% YoY】According to customs data, from January to December 2024, China's lithium product import and export data were as follows: imported lithium concentrates reached 5.25 million mt, up 31% YoY, mainly sourced from Australia, Brazil, and Zimbabwe; net imports of lithium carbonate were 231,000 mt, up 55% YoY; net exports of lithium hydroxide were 113,000 mt, down 11% YoY; net exports of lithium nickel cobalt manganese oxides were 10,900 mt, compared to 2,600 mt in 2023, up 319% YoY. (Cailian Press)
【Eight Departments: Increase Support for Domestic Exploration of Lithium, Cobalt, and Nickel Resources, and Scientifically and Orderly Allocate Mining Rights】The Ministry of Industry and Information Technology and seven other departments issued the "Action Plan for High-Quality Development of New-Type ESS Manufacturing Industry," emphasizing increased support for domestic exploration of lithium, cobalt, and nickel resources, and scientifically and orderly allocation of mining rights to enhance domestic resource security. The plan guides domestic enterprises to diversify, orderly, and collaboratively deploy overseas resource projects to reduce resource development and transportation costs. Under the premise of risk prevention, enterprises are encouraged to strengthen foreign investment and cooperation to enhance the supply capacity of overseas mineral development. Producers are encouraged to manage the full life cycle of products, strengthen green product design, and improve product recyclability and reusability. Under the premise of meeting product performance requirements, producers are supported in using recycled raw materials.
【Leadyo Technology: The Company Has Achieved Full Process Coverage for Mass Production of Solid-State Batteries and Is Expected to Begin Vehicle Testing in 2026】Leadyo Technology announced in its investor communication record that the company has achieved full process coverage for mass production of solid-state batteries, forming comprehensive capabilities including whole-line solutions and key process equipment. It is expected that solid-state batteries may enter vehicle testing in batches by 2026. Additionally, the company has implemented a three-level protection system in the design of its sulphide solid-state battery production line to ensure reliability in explosion-proof, anti-toxic, and long-term corrosion resistance. The management is actively adjusting its business strategy, focusing on high-quality customers and orders, and optimizing internal management to improve per capita output and profitability.

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