[SMM Cobalt Lithium spot Weekly report (0511mur0515)] the production capacity of iron-lithium battery is obvious and the probability of sustained recovery of cobalt price is small.

SMM, 15 May:

Batteries and downstream end markets: in terms of power batteries, new energy vehicle production and sales figures and power battery production data were released this week. According to the China Automobile Association, the production and sale of new energy vehicles completed 80000 and 72000 respectively in April, up 31.6 percent and 9.7 percent from the previous month, down 22.1 percent and 26.5 percent from the same period last year, and the year-on-year decline was 34.8 percentage points and 26.7 percentage points lower than the previous month, respectively. Among them, special purpose vehicles performed well, up 135.2% from the previous month, an increase of 171.8% over the same period last year. With the introduction of policies to support the electrification of public transport, taxis and buses will be the main growth points for commercial vehicles, and the increment of special purpose vehicles is expected to be obvious this year. China's power battery production totaled 4.7 GWH in April, down 35.5% from a year earlier and up 5.5% from a month earlier, according to the China Automotive Power Battery Industry Innovation Alliance. Among them, the output of ternary batteries accounted for 60.6% of the total output, down 33.7% from the same period last year, down 11.7% from the same period last year, and the output of lithium iron phosphate batteries accounted for 39.1% of the total output, down 34.0% from the same period last year, an increase of 49.6% over the previous month. Most of the increase in iron-lithium batteries this month came from special cars. The main reason for the decline in ternary battery production is that the installed capacity of car companies is not as expected. At present, the accumulative inventory of battery factories is relatively high, and the production is reduced moderately.

Electrolytic cobalt and cobalt hydroxide: domestic electrolytic cobalt prices rose this week. Chinese prices are at historically low levels this week because of relatively strong overseas prices, with some liquidity flowing into the market to push up electrolytic cobalt prices, while some downstream demanders have just needed to buy to support a price correction. With regard to cobalt hydroxide, although the price of electrolytic cobalt has rebounded, the discount coefficient for raw material procurement is still on the low side. After the lifting of the ban on South African ports in early May, individual domestic demanders replenished raw materials (expected to arrive in June or July), so raw material market prices fell slightly this week. At present, China's large smelter raw material stocks are relatively sufficient, South African port capacity recovery is slow, raw material prices are expected to stabilize in the short term. The price of SMM electrolytic cobalt is 23.5-250000 yuan / ton, up 10, 000 yuan / ton from last week. The price of cobalt hydroxide in SMM is $9.6 to $10.2 a pound, down $0.20 a pound from last week.

Cobalt and nickel salts: cobalt salt prices have risen slightly this week. The upstream cobalt raw material cost support and may face the raw material shortage problem in early June, the cobalt salt plant still raises the quotation this week. Downstream inquiries increased, acceptance of price increases increased compared with last week, but downstream demand has not improved much, procurement is still cautious. This week the market cobalt sulfate 45000 yuan / ton transaction; cobalt chloride transaction is less, only a few tons of chemical plant procurement transaction, the price is about 5.5-56000 yuan / ton, non-mainstream transaction price, transaction volume. The price of cobalt sulfate in SMM is 4.5-47000 yuan / ton, up 500 yuan / ton from last week. The current price of SMM cobalt chloride is 5.3-56500 yuan / ton, up 250 yuan / ton from last week. The price of SMM battery grade nickel sulfate is 23000-23500 yuan / ton, down 5 million yuan / ton compared with last week.

Cobalt oxide: cobalt oxide prices rose slightly on Thursday. Cobalt oxide manufacturers raised prices this week stronger than cobalt salt, some prices rose to 180000 yuan / ton, but downstream lithium cobalt manufacturers wait-and-see mood, transactions sporadic. Cobalt tetroxide is currently basically ordered in May, with a little unpriced, and there may be room for a slight increase in price. The current price of SMM cobalt tetroxide is 17.1-176000 yuan / ton, up 1000 yuan / ton from last week.

Ternary precursor: the price of the body before the yuan was flat on Wednesday. After the festival, the downstream material factory inquires more, the actual transaction is sporadic, the cobalt price is strong, the nickel price rises slightly, the downstream pressure price is serious, the precursor enterprise is difficult to push up the price. Most of the downstream material factories go to inventory, overseas orders have not yet been restored, and a number of manufacturers have reduced prices to maintain production. The price of SMM ternary precursor (523) is 7.1-73000 yuan / ton, the average price is the same as last week. The price of SMM ternary precursor (622) is 7.8-81000 yuan / ton, the average price is the same as last week.

Lithium carbonate: lithium carbonate prices continue to fall this week. Domestic demand for lithium salt was weak this week, market inventory pressure remained, and lithium carbonate transaction prices continued to fall. At the beginning of the week, the industrial grade lithium carbonate market has appeared 33000 yuan / ton quotation. Considering that the downstream application of electric carbon is mainly the current dismal demand of the ternary power market, in order to ship, some large plants plan to gradually shift to the production of industrial grade lithium carbonate (or quasi-battery grade lithium carbonate). In addition, some smelters in Qinghai began shipping in late April, which is below the prevailing market prices for shipments or strategies that companies tend to adopt, based on existing market demand. This week SMM battery grade lithium carbonate price is 4.3-44000 yuan / ton, the average price is down 750 yuan / ton from last week. This week, the price of SMM industrial grade zero lithium carbonate is 3.4-39000 yuan / ton, down 1250 yuan / ton compared with last week.

Lithium hydroxide: battery grade lithium hydroxide prices are flat this week. There were few transactions in the domestic lithium hydroxide market this week, and prices remained stable. Tesla Shanghai factory-LG industry chain currently maintains a state of full production, high nickel material orders increase month by month, but in April Ningde era overseas export orders dropped sharply, its high nickel material suppliers prepared more inventory in the first quarter, in April also began to reduce production compared with the same period last year, lithium hydroxide domestic demand reduction is obvious. In the second quarter, the order of high nickel material in Ningde era has not been adjusted for the time being, the material factory is mainly to remove inventory, and has suspended the high nickel production line in late April. This week, the price of SMM battery grade lithium hydroxide (coarse particles) is 5.3-59000 yuan / ton, the average price is the same as last week.

Lithium cobalt: the price of lithium cobalt rose slightly this week. Domestic orders for lithium cobalt in May were slightly lower than in April, and according to customer feedback in overseas markets, the recovery was not optimistic, and there was no significant increase in procurement demand for lithium cobalt. This week, the price of cobalt series raw materials rose slightly in the upper reaches, the price of lithium series raw materials fell slightly, the downstream cobalt lithium battery factory is still under pressure, and the price of lithium cobalt acid is under great pressure. The price of lithium cobalt sulfate in SMM4.35V is 19.2-196000 yuan / ton, up 500 yuan / ton from last week.

Ternary materials: the price of ternary materials is flat this week. The price of the upstream precursor is under pressure this week, the demand of the battery factory is weak, the acceptance of the price increase is low, and the price of ternary material remains unchanged. Overseas car companies in Europe and the United States have resumed work one after another, but the whole car factory has returned to production more slowly, and the export orders of material factories have not yet been restored. The domestic battery factory is in the inventory state, the purchase will is not high. The price of SMM ternary material (type 523) is 11.1-118000 yuan / ton, the average price is the same as last week. The price of SMM ternary material (model 622) is 13.1-139000 yuan / ton, the average price is the same as last week.

Lithium iron phosphate: the price of lithium iron phosphate fell this week. Lithium carbonate prices continued to fall this week, superimposed iron phosphate prices also fell slightly, lithium iron phosphate prices fell. Domestic power market demand is weak, orders have not increased. The purchase volume of 5G base stations in the energy storage market has gradually increased since April, but the supply of iron and lithium is on the high side, the market is grabbing orders seriously, most manufacturers are forced to reduce prices, and the price of iron and lithium basically fluctuates up and down the cost line. This week SMM lithium iron phosphate (power) price is 3.5-38000 yuan / ton, the average price is down 1500 yuan / ton from last week.

Lithium manganate: the price of lithium manganate fell this week. Lithium carbonate prices continued to decline this week, the impact of overseas export orders continued, lithium manganate prices fell slightly. Volumetric lithium manganate has many types and a wide price range, some manufacturers reduce prices before the festival, the price fluctuates slightly, and the market turnover is not much after the festival. This week's SMM lithium manganate (capacity type) price is 2.15-29500 yuan / ton, the average price is 250 yuan / ton lower than last week. The price of SMM lithium manganate (power type) is 3.35-35500 yuan / ton this week, down 500 yuan / ton compared with last week.

Future forecast: cobalt prices will rise this week, but the current new energy market demand continues to be depressed, large superalloy and magnetic materials manufacturers have sufficient electrolytic cobalt raw materials, and the spot market transaction scale is small. SMM believes that the probability of continuous recovery of cobalt price in the later stage is small. Lithium, the current price of lithium carbonate has entered a cyclical bottom range, according to SMM, due to the current high base of ore and finished product inventory, enterprises are not willing to enter the mine, this month, some enterprises have begun to reduce the operating rate or stop shipping, battery-grade lithium carbonate prices are expected to gradually stop falling and stabilizing. With the change in the supply and demand structure of lithium hydroxide, the upstream and downstream price negotiations are based on new market conditions, and the market price of lithium hydroxide may be loose later this month.

SMM Battery Materials Research team

Qin Jingjing 021-51666828

Lin Fangwen 021Mui 51666878

Mei Wangqin 021-51666759

Huo Yuan 021-51666898

Wuyang 021-51666818