【SMM Analysis】The demand is weak due to price inversion, leading to a slight downward trend in the prices of lithium battery waste

Recently, the lithium battery scrap recycling market has remained sluggish. The prices of NCM and LFP scrap have both declined to varying degrees. Supply side, considering that some OEM plants still have high-priced inventory from previous tenders that need to be consumed, they are resistant to discounting for clearance. Therefore, when lithium salt prices rebounded earlier, they maintained a firm pricing stance. However, as lithium salt prices have returned to a downward trend after a brief rebound, there is significant selling pressure on lithium carbonate, and the market generally expects an oversupply in the future. This has somewhat shaken the firm pricing sentiment of some OEM plants. Together with some wet-process plants anticipating a further decline in lithium salt prices, there is also an intention to sell off their scrap inventory, leading to a slight decrease in market quotations.

Demand side, integrated wet-process enterprises, mainly for OEM or self-use, are still purchasing scrap normally. However, other small and medium-sized wet-process plants are experiencing poor economics due to the current inverted cost-to-price ratio of scrap and salt, resulting in extremely low operating rates. Some leading large plants can still maintain high operating rates, but most small and medium-sized wet-process plants are operating at only 20-30% capacity. Production cuts and shutdowns are common, leading to a negative sentiment towards scrap purchasing downstream. Due to cost factors, there is significant price pressure on upstream suppliers. Multiple factors together have driven the transaction focus of NCM and LFP scrap slightly downward. It is expected that the prices of NCM and LFP scrap will continue to decline steadily in the short term.