SHANGHAI, Sep 9 (SMM) – Firm demand and low inventories continued to grow spot prices of refined cobalt in China last week. SMM expects growing exports of refined cobalt to narrow the spread between domestic, overseas prices in the near term. Demand from the digital market will likely provide strong support to near-term prices of cobalt salts. Prices of lithium products may stem their declines in the weeks ahead as inventories at lithium salt smelters stabilise and pessimism around spodumene supply glut eases.
SMM learned that top China’s battery producers stepped up to resume production of lithium iron phosphate (LFP) batteries since mid-August due to greater safety performance and price advantage of LFP batteries after subsidy cuts on new energy vehicles (NEV). Their production of LFP batteries currently draws close to full capacity. However, resumption across ternary battery makers remained slow with the operating rates averaging between 30-40%.
As China further scales back subsidies and relies more on market forces to boost NEV, differentiation of power battery products will become increasingly distinct with LFP batteries being applied to low-speed passenger vehicles, micro EVs, busses, special vehicles, and ternary batteries to high-end models and hybrid cars.
Last week, domestic producers of refined cobalt continued to hike offers on low inventories and higher overseas prices. Stable downstream demand buoyed traded prices. Suppliers of cobalt intermediate products, including cobalt hydroxide, started to reopen offers last week.
SMM assessed traded prices of refined cobalt climbed 10,000 yuan/mt from a week ago, to stand at 262,000-272,000 yuan/mt in the week to Friday September 6. Prices of cobalt hydroxide rose $0.4/lb on the week to $9.6-10.7/lb.
Prices of cobalt chloride grew significantly among cobalt salts, propelled by strong demand from the digital market. Prices of cobalt sulphate also extended increases, but were barely accepted by downstream precursor makers on slow recovery of the power battery market and rising prices of nickel sulphate, another feedstock to produce precursor.
SMM assessed prices of cobalt sulphate at 50,000-54,000 yuan/mt in the week to Friday September 6, up 2,000 yuan/mt on the week, with prices of cobalt chloride standing at 63,000-68,000 yuan/mt, up 6,500 yuan/mt.
Prices of nickel sulphate jumped an average 2,000 yuan/mt on the week to 29,000-32,500 yuan/mt, bolstered by record high prices of nickel after Indonesia announced to expedite its mineral ore exports ban by two years from an original schedule of 2022.
Solid downstream demand in a traditional peak season continued to buoy prices of cobalt (II, III) oxide, used to produce lithium cobalt oxide (LCO), with offers by major producers standing as high as 210,000 yuan/mt.
SMM assessed that trades of cobalt (II, III) oxide occurred at 193,000-203,000 yuan/mt as of Friday September 6, up 8,000 yuan/mt from a week ago.
Prices of ternary precursor moved higher with prices of raw materials cobalt and nickel. But ternary precursor producers only limitedly accepted surged prices of nickel sulphate, due to sluggish demand from the power battery market.
In the week to Friday September 6, prices of NCM523 rose 5,000 yuan/mt on the week, to 92,000-97,000 yuan/mt, with prices of NCM622 climbing 6,000 yuan/mt, standing at 99,000-103,000 yuan/mt.
A lack of significant pickup in ternary materials demand extended declines in prices of lithium carbonate, but brisk demand season for LCO helped underpin consumption and limited the drop in prices of battery-grade lithium carbonate.
Falling prices of lithium carbonate over the past three months weighed its profits to lows, and may drive producers to shift their focus to lithium hydroxide in the near term.
SMM assessed prices of battery-grade lithium carbonate at 60,000-63,500 yuan/mt, down an average 800 yuan/mt on the week. Prices of industrial-grade lithium carbonate lost an average 1,000 yuan/mt on the week to 52,000-54,000 yuan/mt.
Prices of lithium hydroxide may also face downward pressure as demand holds steady and supplies keep growing after August’s maintenance at key producers.
As of Friday September 6, prices of battery-grade lithium hydroxide (coarse particle) shrank an average 2,000 yuan/mt on the week, to stand at 69,000-72,000 yuan/mt, SMM assessed.
Prices of LCO, used to produce 4.35V batteries, rose an average 2,000 yuan/mt on the week, to 202,000-212,000 yuan/mt as of Friday September 6, buoyed by higher prices of feedstock cobalt (II, III) oxide. Downstream producers may look to alternatives to LCO if cobalt prices grow too fast to be accepted by consumers.
Prices of ternary materials continued to climb on elevated costs of feedstock precursor and improved demand from the digital market. SMM assessed that prices of both NCM523 and NCM 622 materials grew 7,000 yuan/mt on the week to 138,000-146,000 yuan/mt and 155,000-162,000 yuan/mt, respectively.
Prices of LFP material remained unchanged at 46,000-49,000 yuan/mt last week as lower prices of lithium carbonate, raw material to produce LFP, depressed upward momentum in LFP prices, despite demand recovery from downstream battery producers since mid-August.
SMM expects a significant rally in LFP consumption in the fourth quarter.
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 this month, but intensified competition in the market and falling prices of raw materials may prevent a rebound in LMO prices.