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Prices of refined cobalt rally with lithium salts prices falling on week
Aug 5,2019 13:29CST
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Source:SMM
Cobalt, lithium prices may remain under pressure from excessive supplies in H2

SHANGHAI, Aug 5 (SMM) – Cobalt prices may remain under pressure from excessive supplies in the second half of this year even as demand may pick up in the third and fourth quarters. Resumed lithium production in Jiangxi province and steady release of new capacity in Sichuan may continue to grow pressure on lithium prices. 

Major producers of power batteries are likely to destock and barely increase their operating rates in August on current high inventories of ternary batteries, despite improved orders from automakers. Some car producers estimated a sharp decline in electric vehicle (EV) output in July, following an installation rush in June for subsidies and due to squeezed demand by cheap vehicles with lower emission standards. 

The market may look at costs and weight of EV, instead of nickel content, in the second half of this year, as compact sedan cars are believed to be the main driver, an SMM survey found. 

After a round of price negotiations between carmakers and battery producers on subsidy cuts at the end of June, current prices of prismatic ternary battery sets stand at 0.8-0.85 yuan/Wh, and prices of prismatic lithium iron phosphate (LFP) battery set at 0.65-0.75 yuan/Wh. Falling prices of raw materials are expected to push down batteries prices further in the second half of the year. 

Prices of refined cobalt rallied a bit last week as major producers raised offers on active enquiries. SMM assessed prices of refined cobalt climbed 5,000 yuan/mt from a week ago, to stand at 218,000-230,000 yuan/mt in the week to Friday August 2. 

Prices of cobalt hydroxide remained unchanged on the week at $7.5-7.7/lb, after the signing of some long-term contracts in the previous week. 

Prices of cobalt, nickel salts remained at lows after bottomed out, as downstream demand failed to recover even though improved enquiries for cobalt salts and intermediate products prompted producers to increase offers.

Prices of cobalt sulphate came in at 36,000-38,000 yuan/mt in the week to Friday August 2, prices of cobalt chloride at 42,000-44,000 yuan/mt, and that of nickel sulphate at 24,000-27,500 yuan/mt, all standing flat from a week ago, according to SMM assessment.

Stabilised downstream consumption kept prices of cobalt (II, III) oxide barely changed at 145,000-148,000 yuan/mt last week. 

Prices of ternary precursor nudged up on the previous price rally of cobalt, nickel salts, but downstream purchases did not improve. 

In the week to Friday August 2, prices of NCM523 rose 1,000 yuan/mt on the week, to 72,000-75,000 yuan/mt, with prices of NCM622 climbing 2,000 yuan/mt, standing at 80,000-81,000 yuan/mt. 

Greater orders from major downstream producers failed to support prices of lithium carbonate as supplies remained sufficient. Sluggish demand in the power battery market weighed on purchases of battery-grade lithium carbonate, and triggered production cuts at some lithium salts producers. Amid ample supplies, prices of industrial-grade lithium carbonate followed prices of battery-grade materials lower. 

SMM assessed prices of battery-grade lithium carbonate at 64,000-68,000 yuan/mt, and prices of industrial-grade lithium carbonate at 59,000-62,000 yuan/mt, both down an average 2,500 yuan/mt on the week. 

Last week, prices of battery-grade lithium hydroxide also trended downwards on limited purchases domestically. Overseas demand for lithium hydroxide remained steady. 

As of Friday August 2, prices of battery-grade lithium hydroxide (coarse particle) shrank an average 1,000 yuan/mt on the week, to stand at 74,000-78,000 yuan/mt, SMM assessed.

Stable purchases kept prices of lithium cobalt oxide (LCO) used to produce 4.35V batteries at 185,000-195,000 yuan/mt, unchanged from the previous week.

Higher raw materials prices drove producers of ternary materials to hike offers, but little improvement in downstream demand capped the increase in prices. 

SMM assessed that prices of NCM523 materials grew 1,000 yuan/mt on the week to 126,000-134,000 yuan/mt, and prices of NCM 622 advanced 2,000 yuan/mt to stand at 143,000-150,000 yuan/mt.

Despite lower production of LFP materials in July and robust prices of yellow phosphorus, used to produce LFP, poor downstream consumption and falling prices of lithium carbonate depressed upward momentum in LFP prices.  

In the week to Friday August 2, prices of LFP used in power batteries stood at 46,000-49,000 yuan/mt, flat from the previous week, SMM assessed.

Prices for lithium manganese oxide (LMO) used in high-energy-density batteries edged down as the market share was squeezed by other battery materials even as downstream demand expanded. This, together with limited demand from the power battery market, also dragged on prices of LMO used in motive batteries.

SMM assessed prices of LMO, used in high-energy-density lithium-ion batteries, lost an average 500 yuan/mt to stand at 29,000-35,000 yuan/mt, and prices of LMO used in motive batteries fell 1,000 yuan/mt on the week to 45,000-47,000 yuan/mt.

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Cobalt
Lithium

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