Tight feedstock supply underpinned cobalt prices, battery-grade lithium carbonate prices to rise

SHANGHAI, Aug 17 (SMM) — Continued tightness in supply of imported cobalt raw materials and slightly improved downstream demand still underpinned cobalt prices, but trades turned quiet after downstream users completed phased stockpiling.

Battery-grade lithium carbonate prices are expected to rise by 500-1,000 yuan/mt in late August or early September, as several producers have gradually reduced operating rates due to high production costs, lowering spot cargoes circulating in markets. In addition, firm high-end prices of industrial-grade lithium carbonate limited profits of purifiers, which is likely to boost battery-grade lithium carbonate prices in the short term.

On the downstream front, July new energy vehicles (NEVs) output fell 2.4% on the month but rose 15.6% on the year, while July sales declined 5.5% from a month ago but increased 19.3% from a year earlier, according to data from China Association of Automobile Manufacturers (CAAM). Output and sales of new energy special vehicles fell sharply in July, while that of new energy passenger vehicles (NEPVs) rose slightly, both on a monthly basis. 

China produced 6.08GWh of motive power batteries in July, up 6.4% on the year and 13.8% on the month. This included 3.3GWh of ternary batteries, down 23.1% from 2019, but up 4% from June, and 2.8GWh of lithium iron phosphate (LFP) batteries mainly installed in NEPVs, up 97.8% year on year and 27.2% month on month. Rising sales of NEPVs (SAIC-GM-Wuling and BYD’s Han series) bolstered LFP battery production.