Recent drilling results have revealed that both the Pinheiro and Reservatório ore bodies exceed expectations in terms of lithium grade and resource volume. The company has completed over 80% of its drilling program, with preliminary assay data indicating high-grade spodumene mineralization at depth, which could significantly enhance the project's overall resource base. Industry analysts suggest this discovery may increase total resources by 15-20%, while the high-grade zones could reduce initial ore processing costs and improve cash flow.

This week, the spot price of lithium carbonate showed a slight upward trend. Despite the continuous upward shift in the price center, actual market transactions remained sluggish.

【SMM Analysis】Recycling Industry Events This Week (Jun. 3-6): This week's recycling industry events.

Global mining giant Rio Tinto has signed an agreement with Chile’s state-owned Codelco to jointly develop a major lithium project in the Salar de Maricunga, marking a strategic expansion in battery metals. Under the deal, Rio Tinto will acquire a 49.99% stake in the project company by investing $900 million, collaborating with Codelco to advance the development of this high-grade lithium brine resource.

[SMM Analysis]Summarizing the three articles in this series, the author believes that around 70% of U.S. tariffs on China may be a theoretical equilibrium level. If the tariffs are below around 70%, China's LFP energy storage cells still have a price advantage over those produced by the U.S. on its own production lines. If the tariffs are above around 70%, it would be more advantageous for the U.S. to produce LFP energy storage cells locally. However, assuming that the transshipment trade channel is not completely blocked, transshipment trade remains the most economical way of trade.

[SMM Analysis]This article aims to analyze the price impact of energy storage cells produced in China and exported directly, transshipped via Malaysia, and locally produced in the US from August 13 to January 1, 2026. Some of the data used are theoretical, which may make the results appear on the higher side. The author will try to explain the reasons for each data point in detail so that readers can replace the relevant data to obtain more targeted conclusions. The third article in this series will focus on the price impact caused by tariffs after January 1, 2026.

The following key battery recycling projects progressed this week:

Comprehensive data analysis indicates a further decline in market procurement for lithium battery recycling in May 2025 compared to April 2025. As of April 2025, the total monthly recycling volume (black mass basis) in the SMM recycling market reached 20,592 tonnes, reflecting a month-on-month decrease of approximately 16.2%.

[SMM Analysis]This article is the first in the series, aiming to analyze the price impact of Chinese-produced energy storage cells exported directly, transshipped via Malaysia, and the hypothetical scenario of local production of lithium iron phosphate (LFP) energy storage cells in the US, from May 14 to August 13. Some of the data used are theoretical, which may make the results appear on the higher side. The author will explain the reasons for each data point in detail to allow readers to replace the relevant data and obtain more targeted conclusions. Follow-up articles (II) and (III) will analyze the price impact due to different tariffs at subsequent time points.

In May, the domestic iron phosphate market remained stable, with production up 2% MoM and surging 38% YoY.