【SMM Cobalt-Lithium Morning Meeting Summary: Mica Prices Rise, Market Focus Shifts Upward】

Lithium Ore:

Lepidolite prices rose on Monday. Recently, as the price of lithium carbonate rebounded and rose, some mining enterprises were driven by the rise in salt prices, and there was a certain sentiment of supporting prices. Some mining enterprises and traders attempted to slightly increase their quotations. On the demand side, although the overall operation in Jiangxi region is still low and its sustainability is doubtful, as some small and medium-sized enterprises have gradually resumed work and production, some small and medium-sized manufacturers have purchased lepidolite out of necessity to maintain production, driving the market transaction focus to move up slightly. On Monday, the price of spodumene maintained its upward trend. The move of lithium ore holders to hire others to produce lithium carbonate for them to trade is still prevalent, and lithium ore market inquiries and quotations remain active. However, as buyers do not expect the current rise in lithium salt prices to be sustained for a long time, their acceptance of high-priced lithium ore is limited. Additionally, the current domestic lithium ore inventory does not appear to be in short supply, and downstream purchasing sentiment is generally low, with lithium salt plants having a weak willingness to purchase rising lithium ore. It is expected that in the short term, spodumene prices will remain stable or fluctuate along with lithium salt prices.

Lithium Carbonate:

Lithium carbonate prices rose overall on Monday. On the supply side, as some lithium salt companies are still in the early stages of resuming production after maintenance, their available supply other than long-term orders is relatively limited. Some lithium salt companies have intentions to fulfill future deliveries, so overall, lithium salt companies continue to sell long-term orders but insist on selling spot orders at higher prices, and their spot order quotations continue to rise. However, downstream companies such as cathode material producers have feedback that due to the recent continuous rise in lithium carbonate prices, while the pricing of their products lags behind the increase in lithium carbonate prices, the current price transmission situation makes it difficult to fully pass on the increased raw material costs to downstream customers, gradually squeezing their production profits. Additionally, some downstream cathode material producers believe that the high prices of lithium carbonate in the current market are not driven by real market demand, but rather by expectations of future demand recovery. Therefore, most downstream cathode material producers generally feedback that it is difficult to make purchases for stock at the current high prices, only purchasing a small amount of low-priced goods in the market or making necessary purchases of a small amount of high-priced goods based on orders to maintain a relatively reasonable and safe level of raw material inventory. Spot market lithium carbonate prices moved upward.

Lithium Hydroxide:

Lithium hydroxide prices rose slightly on Monday. From the perspective of market supply and demand, affected by factors such as the recent rapid rise in lithium carbonate prices and low inventory levels, lithium salt companies adopted a strategy of mainly selling through long-term contracts and insisting on higher prices for spot orders. Lithium salt companies generally raised their quotations for lithium hydroxide, with some companies' spot quotations even exceeding 90,000 yuan. Meanwhile, some lithium hydroxide producers also increased their quotations due to the recent rise in lithium salt prices and higher costs. As prices continue to rise, some downstream cathode material producers have become more accepting, with their inquiry and purchase frequency warming up recently, driving the market transaction focus to move up slightly.

Electrolytic Cobalt:

This week, the price of electrolytic cobalt has seen a slight rebound. From the supply side, production output among various manufacturers is normal. From the demand side, due to signs of an overcorrection in earlier prices, inquiries for spot goods have increased, yet actual transactions remain scarce. Additionally, influenced by the news about accumulating C, the market continues to hold firm prices, maintaining a strong quotation, but actual high-price transactions are somewhat stagnant.

Intermediate Products:

This week saw a modest rise in the prices of cobalt intermediate products. From the supply side, due to transportation issues leading to delayed shipping schedules, the overall supply is slightly tight, with spot goods showing a high level of concentration. From the demand side, with the existence of inventory replenishment needs, demand has somewhat recovered. As for the market, despite numerous inquiries this week, the immediate cost calculated from current intermediate product prices is relatively high, resulting in a clear down-pressing attitude from downstream buyers and somewhat stagnant actual transactions. It is expected that the prices of cobalt intermediate products will remain stagnant next week.

Cobalt Salts (Cobalt Sulfate and Cobalt Chloride):

The prices of cobalt salts have remained stable this week. On the supply side, some enterprises have gradually resumed production after the holidays, leading to an increase in the production of cobalt salts. On the demand side, downstream buyers are mainly preparing for March stockpiling, and market inquiries have increased accordingly. However, due to the downstream purchasers' low willingness to accept higher prices, actual high-price transactions are difficult. Since the salt factories have high immediate costs, they maintain a firm stance on pricing. It is expected that spot prices may remain stagnant next week, but it cannot be ruled out that some enterprises may slightly reduce prices under the pressure to deliver goods.

Cobalt Tetroxide:

Prices of cobalt tetroxide have remained stable this week. From the supply side, the operation rate of smelters is still acceptable. From the perspective of downstream demand, this week's market inquiries and transactions have shown signs of recovery, with a slight rebound in new orders. As for production costs, due to the standoff in cobalt salt prices, cobalt tetroxide is facing difficulties, hence the firm stance on pricing persists. However, downstream demand for high prices is not strong, therefore transaction prices have not fluctuated much, and operations remain stable.

Nickel Sulfate:

This week, the price of nickel sulfate has continued its upward trend. Looking at the supply side, salt factories are gradually resuming production, but due to constraints in raw material supply—such as intermediate products from the wet process and waste materials being tight and expensive—production pace remains slow. Regarding inventory, stocks at various salt factories are low, and spot shortages persist. On the demand side, with overall low stocks in the ternary material industry chain, demand can be promptly conveyed. Therefore, in the context of relatively optimistic orders for overseas and domestic precursors in March, precursor enterprises still have purchasing needs for nickel sulfate. The market is currently active in terms of inquiries and transactions. Demand for periodic purchases, under the current supply shortage, has further driven up the price of nickel sulfate. The coefficient is upward, now at 79-80 to LME nickel. Raw material prices are rising faster than finished products, with cost support strengthening. In the short term, the driving force for the price increase of nickel sulfate still exists.

Ternary Precursors:

Prices of ternary precursors have slightly rebounded this week. On the cost side, with a minor rebound in nickel prices, the manufacturing costs of ternary precursors have gone up modestly. Market-wise, some precursor enterprises have raised their quotations, slightly shifting the center of market transactions upward. On the supply side, enterprises that had previously ceased production for maintenance after the holiday have since completed resumption of work. Additionally, considering raw material costs, some enterprises are selectively taking orders. On the demand side, due to the upward trend of nickel prices combined with March increment expectations, downstream inquiries have increased. Future expectations suggest that while short-term recovery expectations for nickel prices remain, the downstream battery cells and cathode materials industries lack the ability to accept price increases of ternary precursors, thus the rebound space for ternary precursor prices is limited.

Ternary Materials:

Prices of ternary materials have rebounded this week. On the cost side, prices of nickel and lithium have rebounded, leading to higher manufacturing costs for cathode materials. In the power market, long-term contracts remain the primary focus, with no major adjustments in related metal discounts. In the consumer market, fixed-price deals prevail. After a significant price correction earlier due to low-nickel product sales, prices rebounded sharply after the recovery of metal prices. On the supply side, production schedules in February went downward during the off-season of Chinese New Year, but in March, enterprises are resuming, and mid- to high-nickel materials show more optimism. From the demand perspective, earlier, battery cell manufacturers had stocked up to some extent, making their short-term purchasing intent for rising ternary materials prices rather weak. Battery cell factories for electric vehicles in March, however, see increased demand, mainly to stock up for mid- and high-nickel end projects. Consequently, the expectation is that ternary material prices will run strong.

Lithium Iron Phosphate:

At the beginning of this week, the price of lithium iron phosphate continued to rise steadily. On the cost side, prices of lithium carbonate increased, slightly inflating the cost of iron phosphate materials. On the supply side, order recovery in March was favorable, and lithium iron phosphate enterprises are producing based on sales. As the industry-wide startup rate rebounds, the total market supply increases. On the demand side, the power sector and energy storage sector are resuming normal demand, leading to an increased demand for lithium iron phosphate materials. It is estimated that lithium iron phosphate prices will run strong in the near term.

Lithium Cobalt Oxide:

This week, the price of lithium cobalt oxide has remained stable. On the cost side, while cobalt prices are stable, lithium prices are rising, driving up the manufacturing costs of lithium cobalt oxide. Market-wise, leading lithium cobalt oxide enterprises have kept their quotations stable, and some companies have slightly increased their prices. However, the downstream acceptance of higher prices is weak, resulting in a stable market price trend. On the supply side, February was the off-season for the lithium cobalt oxide market, with very few plants maintaining continuous production lines. Most plants had holiday plans, and after the holidays, some have arranged to resume production, with a good expectation for March startup. Future expectations are that lithium prices still have room to rise, and lithium cobalt oxide prices may stabilize with a slight rebound.

Anode Materials:

Prices of anode materials have remained stable this week. Regarding costs, prices for low-sulfur petroleum cokes from some refineries in Northeast China have been adjusted upwards, while China National Offshore Oil Corporation’s prices have fallen slightly, resulting in a slight fluctuation overall. Prices for oil-based needle coke have seen a small decrease due to the dampened downstream demand and price pressures. Currently, demand and profitability for both calcined coke and petroleum coke are better than that for raw coke, hence needle coke factories show less interest in selling raw coke. At present, there are external orders for graphite processing from some leading anode factories, but prices are still at lower levels, offering very limited help to the recovery of the graphite outsourcing industry, which remains in its off-season. In terms of demand, with March bringing a revival in downstream production, order increments are mainly concentrated among leading anode enterprises, showing a slightly polarized trend overall, with smaller anode companies experiencing limited order recovery. With costs for anode raw materials continuing to rise, yet prices difficult to increase, profit margins for such products are further eroded, increasing pressure on enterprises.

Separator:

Prices for separators have remained stable on Monday. On the supply side, after the holiday, some leading separator enterprises have gradually recovered from production line maintenance, slightly increasing production schedules. On the demand side, some companies have started to make essential purchases after the holiday, resulting in stable buying. Some enterprises have slowly approached their prices towards the previous year's agreed value, causing a slight drop in prices.

Electrolyte:

This week, electrolyte prices remain stable. On the cost side, the overall cost of electrolytes has slightly increased due to a minor rise in lithium hexafluorophosphate stemmed from lithium carbonate's price hike, while prices for solvents and additives are still stable. Production-wise, electrolyte factories have begun to resume work and are stocking up on raw materials such as hexafluorophosphate, maintaining a production-based-on-sales state. For the demand side, the arrival of March has shown indications of a slight revival in end-customer demand. Major new energy vehicle manufacturers are increasing discounts to stimulate consumption, while battery factories expect a small increase in their electrolyte purchases for March. However, since it takes time for the demand to be transmitted during negotiations between battery and electrolyte factories, it is expected that electrolyte prices will continue to run weakly stable in the short term.

Sodium Batteries:

The transaction center for sodium battery cathodes remains quite stable, with prices for layered oxide cathodes hovering in the range of 50,000-60,000 yuan per ton. Currently, quotations from manufacturers are predominantly for sample shipments and offer significant price discounts based on transaction volume and customer type. Future expectations suggest that as we enter the stage of mass production, the prices of sodium battery cathodes still have room to decrease. For anode materials, prices vary greatly depending on materials; the mainstream price for domestic biogenic hard carbon is close to 80,000 yuan per ton, and it continues to fall rapidly.

Downstream and End Users:

The Ministry of Industry and Information Technology and other seven departments have issued guidance on accelerating the green development of the manufacturing industry. The guidance aims to plan for industries of the future within the green and low-carbon sector. It focuses on the needs for energy revolution and industrial transformation under the "dual carbon" goals, planning and laying out the development of future energy and manufacturing industries such as hydrogen energy, energy storage, biomaterial manufacturing, and carbon capture, utilization, and storage (CCUS). Centered around hydrogen demand in fields like petrochemicals, steel, transportation, energy storage, power generation, etc., efforts are made to establish a full industrial chain technical equipment system for hydrogen production, storage, transportation, and use, thus enhancing the economy and completeness of hydrogen technology. Attention is also directed towards energy storage in various application scenarios on the supply side, network side, and user side of the power system, developing a variety of new energy storage technologies and constructing a product matrix required by the new power system, achieving grid-scale energy storage applications across multiple timescales. By leveraging the environmentally friendly advantages of biomaterial manufacturing, such as high selectivity, efficiency, and low waste, efforts are focused on light industrial fermentation, pharmaceuticals, chemicals, agriculture, and food sectors to establish a technology system for the creation of core strains and key enzymes used in biomaterial manufacturing. Focusing on the entire lifecycle of CCUS technology to improve energy efficiency and reduce costs, research and development, as well as demonstrations of industrial process coupling with CCUS and biological conversion and utilization of CO2, are carried out.