PCAM and CAM price review review and forecast

This week, operations across the industry chain continued to diverge. The lithium segment remained relatively strong: an upward shift in the price center of lithium carbonate drove ore prices and lithium hydroxide higher, but salt plants became less willing to accept high-priced ore, and further gains were still constrained by margins. Lithium carbonate futures retreated from highs, while spot inquiries and transactions improved somewhat; downstream demand was still dominated by just-in-time procurement. Some metal salts and intermediate product markets remained weak, with more low-priced supply and muted actual transactions; nickel sulphate held steady, but spot orders were under pressure. Ternary cathode precursor prices were weak due to softer raw materials, while ternary cathode material continued to rebound, supported by a rebound in lithium chemicals and stockpiling ahead of the peak season. LFP supply and demand remained in a tight balance; tight raw materials, declining inventory, and rising processing fees strengthened cathode enterprises’ bargaining power. The anode, separator, and electrolyte segments were broadly stable, while supply bottlenecks persisted in parts of the sodium-ion battery chain. On the recycling side, demand for LFP electrode was active, while transactions in high-metal-content black mass were cautious; going forward, focus will be on whether peak-season demand materializes and how raw material price pass-through evolves.

At the beginning of the week, the industry chain as a whole continued a weak and divergent pattern. Trading in upstream raw materials and lithium chemicals remained sluggish, with a wide psychological price spread between sellers and buyers. Some low-priced supply continued to be released, and the price center remained under pressure. The electrolysis products, intermediate products, and powder markets all lacked clear demand support. Downstream players mainly relied on just-in-time procurement and cargo pick-up under long-term contracts, with limited spot order activity. The precursor market stayed in the doldrums, affected by declines in some raw material prices. Top-tier players saw some recovery in export orders and production schedules in China, but small and medium-sized enterprises were still constrained by the off-season. Cathode material prices edged up, driven by a rebound in lithium chemicals prices and stockpiling ahead of the traditional peak season, while demand from the European auto market also provided some support. The consumer electronics-related materials market delivered mediocre performance, and price cuts have not yet materially improved shipments. At the industry level, lithium-ion battery production in January–July rose 40.2% YoY. Meanwhile, “anti-involution” governance in key industries continued to advance, and improvements in the supply-demand structure and price order remain worth watching.

SMM August 17: Battery metals demand faces a more gradual growth path as automakers and suppliers signal that hybrids and range extenders will retain a significant role well beyond earlier full-BEV transition timelines, carrying direct implications for the pace at which spodumene concentrate must convert into lithium carbonate (LC) and lithium hydroxide (LH) downstream. Industry executives argue that decarbonization progress should be measured by total emissions reduction rather than BEV penetration alone, with one powertrain executive projecting that half of passenger vehicles could still carry some form of combustion or hybrid system by 2040. For the lithium supply chain, pack size is the key variable rather than unit count. Hybrids and range extenders still require lithium-ion battery packs, but at a fraction of the capacity used in full BEVs, meaning each hybrid sold absorbs meaningfully less LC or LH per vehicle than a comparable BEV. Lithium remains structurally supported across almost every electrification pathway, unlike nickel, cobalt, and manganese, which carry closer ties to high-nickel chemistries used in longer-range BEVs. A longer hybrid phase would slow the rate at which large-format BEV packs absorb lithium units, easing the pace at which LC/LH conversion capacity needs to be brought online even as upstream spodumene mining and beneficiation projects continue ramping toward planned output targets. The demand path carries logistics implications as well. A more gradual absorption curve for battery-grade lithium salts gives converters and refiners processing spodumene feedstock from Africa, Australia, and South America greater runway to bring hydroxide and carbonate capacity online without facing the acute bottleneck pressure a steep BEV-only ramp would create, allowing producers and converters to better sequence CIF delivery schedules against a less compressed conversion timeline. Policy remains a swing factor: the EU's current framework targets a 100% cut in new car and van tailpipe emissions from 2035, effectively phasing out combustion sales absent new exemptions, though suppliers are pushing for a more technology-neutral approach that credits hybrids and range extenders. Greater EU flexibility would further extend the timeline over which spodumene supply needs to convert into battery-grade LC/LH. SMM View: A longer mixed-powertrain era points to a more forgiving supply-demand balance across the spodumene-to-lithium-salt chain in the near term, giving upstream concentrate producers and downstream LC/LH converters additional room to align capacity growth with actual offtake absorption rather than racing an aggressive BEV-only demand curve. This may moderate the urgency behind some conversion capacity expansions currently underway across major producing and processing regions, while the structural case for spodumene supply growth remains intact given lithium's exposure across virtually every electrification pathway. SMM will continue tracking how powertrain mix assumptions filter through into spodumene pricing, conversion economics, and logistics planning across key export corridors.