[SMM Cobalt and Lithium Morning Meeting Summary] Prices of Ternary Cathode Materials Continue to Rise, Spot Transactions Remain Limited

Lithium Ore:

At the beginning of this week, spodumene prices edged down slightly WoW. With the downward trend in lithium carbonate prices, downstream demand for high-priced lithium ore continued to weaken. Recently, there have been transactions below $850/mt CIF, driving spodumene ore prices downward. On the lepidolite side, last week's two lepidolite auction prices remained at relatively high levels, further boosting the sentiment to raise prices among other suppliers, leading to a slight overall price increase.

Lithium Carbonate:

At the start of this week, spot lithium carbonate prices showed a slight increase. From the current market sentiment of sellers and buyers, upstream lithium chemical plants maintained a strong sentiment to stand firm on quotes, with limited willingness to sell. Some downstream material plants saw an increase in customer-supplied volumes, coupled with expectations of production schedule adjustments, leading to relatively weak purchase willingness downstream. Overall, market transactions remained relatively subdued, and the spot-futures price spread strengthened. Considering the continued significant surplus in lithium carbonate, spot prices are expected to have some downside room, accompanied by sideways movement.

Lithium Hydroxide:

At the beginning of this week, lithium hydroxide prices were basically flat WoW. On the demand side, a few ternary cathode material plants reported some spot order demand during production. Due to the large volumes and the firm pricing stance of upstream suppliers, transaction prices remained at relatively high levels. Other downstream buyers showed little interest in large spot orders, with their expected price levels trending downward in line with current market prices and purchase demand. Lithium hydroxide prices are expected to continue a slight downward trend in the short term.

Refined Cobalt:

This week, refined cobalt spot prices stabilized in their upward trend. On the supply side, refined cobalt supply remained relatively sufficient, with smelters operating at high capacity utilisation rates and continuing their strategy of standing firm on quotes and holding back sales. On the demand side, downstream inquiries became more rational, overseas shipments slowed, and panic sentiment eased. In the market, smelters maintained a strong sentiment to hold back sales, while speculative sentiment eased, leading to stabilized spot price increases. Refined cobalt spot price increases are expected to slow this week.

Intermediate Products:

This week, cobalt intermediate product spot prices rose. On the supply side, logistics from South Africa to Chinese ports remained normal, but upstream producers had limited inventory and generally adopted a strategy of holding back sales, supplying only long-term contract customers, with limited spot order sales, keeping market liquidity low. On the demand side, some downstream salt plants had rigid restocking demand, and the profit margin between raw materials and cobalt salts encouraged active inquiries and purchases, driving up intermediate product spot prices. In the short term, the supply-demand imbalance is unlikely to ease, and cobalt intermediate product prices are expected to remain on an upward trajectory this week.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

This week, cobalt sulphate prices rose slightly. The market is gradually digesting the disruption caused by the DRC's suspension of cobalt exports, and upstream producers' sentiment to hold back sales began to ease. On the supply side, upstream salt plant quotations stabilized, with improved sentiment for transactions. Downstream enterprises showed improved restocking enthusiasm WoW, but their expected prices remained slightly below current salt plant quotations, with actual transactions mainly driven by rigid restocking needs, leading to slight improvements in market liquidity. Cobalt sulphate spot prices are expected to stabilize this week.

This week, cobalt chloride prices continued to rise, though at a slower pace than the previous week. Influenced by market sentiment, cobalt chloride producers generally adopted a wait-and-see attitude, refraining from selling, with high quotation intentions. Some producers used small high-priced transactions to push up spot prices. However, as raw materials were gradually consumed, the sentiment to hold back sales intensified, leading to a situation of high prices but limited transactions. Looking ahead, with rising costs and sustained sentiment, cobalt chloride prices are expected to increase further.

Cobalt Salts (Co3O4):

This week, Co3O4 prices continued to rise. Rising costs and strong market sentiment drove this trend, with smelters generally suspending quotations and holding back inventory for sale. Some enterprises quoted at high levels, with increased high-priced transactions pushing up Co3O4 spot prices. However, due to lower-than-expected demand from LCO producers and existing inventory levels, price increases may slow this week, though there is still room for further growth.

Nickel Sulphate:

On March 17, the SMM battery-grade nickel sulphate index price was 27,812 yuan/mt, with a quotation range of 27,750-28,350 yuan/mt, and the average price increased WoW. On the cost side, recent LME nickel prices fluctuated at high levels in the short term. This week, some traders raised the pricing coefficient for cobalt in MHP by about 5 points. The MHP coefficient remained at a relatively high level, with limited downward drivers for raw material coefficients throughout Q2. On the demand side, affected by cobalt market fluctuations, precursor plants slowed their procurement pace, though some still had rigid stocking demand. On the supply side, raw material prices fluctuated at high levels, and nickel salt smelters maintained a strong sentiment to stand firm on quotes. Nickel salt smelter inventories remained low, and market nickel salt liquidity tightened. Considering the continued demand, low inventory levels, and strong sentiment among nickel salt smelters, nickel salt prices are expected to rise further in the short term.

Ternary Cathode Precursors:

This week, prices for 5-series consumer-grade, 6-series consumer-grade, and 8-series power-grade ternary cathode precursors continued to rise. On the raw material cost side, influenced by the DRC's cobalt export ban and the overall sentiment to stand firm on quotes in the raw material market, nickel sulphate and manganese sulphate prices continued to rise slightly, while cobalt sulphate prices rose significantly, driving up precursor prices across all series. On the demand side, material plants gradually engaged in small-scale stockpiling due to expectations of continued raw material price increases and the depletion of historical inventories. The market remained largely in a wait-and-see mode, though purchase willingness improved WoW. On the supply side, the significant rise in raw material costs exacerbated the losses for precursor producers, who maintained a strong sentiment to stand firm on quotes. Discounts on spot order pricing coefficients increased, with some producers recalculating the discount coefficient for cobalt sulphate separately. Looking ahead to this week, raw material prices are expected to continue rising. With strong sentiment among precursor producers and some downstream restocking demand, precursor prices are likely to rise further.

Ternary Cathode Materials:

On Monday, ternary cathode material prices continued last week's upward trend, though the increase slowed due to the easing of cobalt sulphate price hikes. In the spot market, differing price expectations between sellers and buyers led to limited transactions. Despite supply chain fluctuations, some leading cathode material enterprises maintained stable precursor supplies, with no adjustments to the details or coefficients of long-term contract agreements with downstream buyers. Price changes were mainly concentrated in spot orders and new orders. For other enterprises requiring precursor raw material procurement, production costs increased in the short term.
In settlements with downstream battery manufacturers, some cathode material companies are at a disadvantage in negotiating agreements and may face the risk of losses again in 2025. Therefore, amid the recent rise in raw material prices, some ternary cathode material companies have adopted the stance of "preferring to halt production and incur losses rather than deliver at low prices," raising requirements for coefficients and details in agreements. However, as of mid-March, many companies have yet to finalize orders. With the widespread increase in sulphate prices, the procurement costs of precursors have risen, and ternary cathode material companies have shown a clear tendency to stand firm on quotes and hold back cargoes. It is expected that ternary cathode material prices will maintain an upward trend later this month. LFP: This week, the LFP market price continued the downward trend from last week. Raw material side, lithium carbonate prices fell by about 300 yuan/mt this week. Along with the recent implementation of price increases for processing fees of mid- and high-compaction products, LFP packaging processing fees increased slightly this week. Regarding lithium carbonate discounts, negotiations have not yet been fully concluded. Supply side, as of now, the orders of some leading first- and second-tier LFP material manufacturers have declined compared to the full production plans at the beginning of the month. Actual production fell short of production schedule expectations but still showed an increase compared to February overall. Demand side, downstream battery cell manufacturers' overall production schedules increased significantly compared to February, especially for high-compaction density products. Iron Phosphate: This week, the price of industrial-grade MAP, a key raw material for iron phosphate, rose significantly, with ex-factory prices surpassing the 6,500 yuan/mt threshold. This phenomenon is mainly attributed to the increased use of fertilizers for spring farming in downstream agriculture, leading to higher phosphoric acid costs. Meanwhile, demand for iron phosphate is in a recovery phase, while the supply of industrial-grade MAP remains tight, with inventory levels staying low. As a result, iron phosphate companies face significant challenges in procuring industrial-grade MAP. However, as it is still mid-month, most iron phosphate companies typically conduct business negotiations at the end or beginning of the month, so iron phosphate prices have not shown a significant increase. Current market demand remains weak, making price hikes challenging. LCO: This week, LCO prices were significantly affected by sharp fluctuations in upstream raw material prices, with the latest prices for 4.2V/4.4V/4.5V LCO at 196,000/200,000/210,000 yuan/mt, respectively. Co3O4 prices rose from 160,000 yuan/mt, with some producers suspending quotes and holding back cargoes. Sporadic transaction prices in the market have exceeded 195,000 yuan/mt, with a weekly increase of over 22%. The average price of battery-grade lithium carbonate fell slightly, mainly due to increased operating rates at lithium chemical companies and weak end-use demand. In the 3C sector, performance was mixed, with stable Q1 orders from mobile phone and laptop manufacturers, and LCO procurement driven by rigid demand. In the short term, the risk premium for cobalt resource supply remains with upside room, and LCO prices are expected to continue rising. Anode: This week, anode material prices continued their upward trend. Supply and demand side, the market gradually emerged from the off-season, with both supply and demand showing growth. Cost side, low-sulphur petroleum coke prices declined recently due to weakened demand for anodes. Needle coke prices had previously risen, leading anode material companies to adopt a more conservative procurement approach and push for lower prices. However, as needle coke prices have fluctuated at low levels for a long time, the price pullback this week was relatively limited. Graphitisation electricity costs remained high, leaving narrow profit margins and generating upward price sentiment. Against the backdrop of recovering demand in March, Acheson furnace graphitisation outsourcing prices increased. However, due to sufficient market supply, prices are unlikely to rise significantly. For box furnaces, as many integrated production lines of anode companies use box furnaces, the demand for outsourcing box furnace services remains limited, and prices are relatively stagnant. Separator: This week, the price of dry-process lithium battery separators showed an upward trend, while wet-process separator prices remained stable. From the perspective of market supply and demand, as the market recovers, downstream demand has increased, and separator manufacturers' operating rates have risen. Separator prices were previously suppressed to low levels due to price wars, leaving limited profitability for separator companies. Separator companies have shown a tendency to stand firm on quotes, particularly for dry-process separators, where material prices have already fallen below cost lines, leading to strong upward price sentiment. Looking ahead, some new wet-process separator capacities have not yet reached full production, and the market structure of oversupply is unlikely to change in the short term. Against this backdrop, wet-process separator companies may engage in another round of intense price competition to secure more market orders. However, given that wet-process separator prices are already at low levels, the extent of future price reductions is expected to be minimal. Electrolyte: This week, electrolyte prices declined, with the average price for ternary power-use electrolyte at 24,500 yuan/mt and LFP-use electrolyte at 20,000 yuan/mt. Cost side: The price of its core raw material, LiPF6, dropped significantly, with an average price of 60,900 yuan/mt. Prices of solvents and FEC additives also declined, while VC prices remained stable, leading to an overall decrease in electrolyte costs. Demand side: End-use demand recovered slowly, maintaining stable electrolyte procurement. Supply side: Electrolyte manufacturers produced according to orders from battery cell manufacturers, while LiPF6 producers also produced based on demand from electrolyte companies. The procurement situation for both electrolyte and LiPF6 remained stable. In the short term, cost fluctuations are expected to lead to further declines in electrolyte prices. Sodium-Ion Battery: This week, the sodium-ion battery market remained in a recovery phase, but all aspects showed positive development trends. As the industry chain gradually resumes normal operations, with sodium-ion battery cathode and anode materials, battery cells, and other supporting production lines being launched successively in 2025, if mass production is successfully achieved, sodium-ion battery costs are expected to drop significantly, further enhancing their market competitiveness. Various market participants are closely monitoring industry dynamics and actively preparing to seize opportunities brought by the rapid development of the sodium-ion battery market, promoting its more significant role in the future energy sector. Recycling: This week, with the continued rise in nickel salt and cobalt salt prices, the prices of ternary and LCO black mass also continued to rise, with powdering plants and traders further raising their psychological price levels. Additionally, with the sustained increase in salt prices, the coefficients for ternary and LCO black mass also rose slightly this week. Supply side, LCO scrap accounts for a relatively small proportion of the overall scrap market, with limited supply. Most of the limited supply is concentrated in the hands of traders. Amid the continued rise in cobalt salt prices, companies mostly chose to hold back from selling or sell small quantities at high prices. Demand side, most downstream companies are not optimistic about the continued rise in cobalt salt prices. Moreover, there are relatively few companies that process pure cobalt scrap compared to ternary scrap. Given the option to choose ternary black mass, most companies showed a wait-and-see attitude toward the rising coefficients of pure cobalt scrap. However, a small amount of high-priced scrap was still sold in the market, leading to a slight increase in scrap prices. Cost side, the recent rise in cobalt salt and nickel salt prices has partially restored the costs and profitability of ternary and pure cobalt scrap at the powdering stage, bringing some unbroken materials above the breakeven line. However, LFP scrap prices remained under losses due to the continued decline in lithium carbonate prices. Downstream and End-Use: This week, DC-side battery cabin prices remained stable. The average price for a 5MWh DC-side battery cabin was 0.43 yuan/Wh, while the average prices for 3.44/3.77MWh DC-side battery cabins were 0.438 yuan/Wh. After the release of Document No. 136, most ESS integrators produced and shipped according to demand. A small number of ESS integrators rushed for installations ahead of the June 1 power market reform period, leading to tight supply and demand for 314 battery cells in some battery cell manufacturers. This short-term supply-demand imbalance caused price fluctuations, but as DC-side costs have reached a certain bottleneck, battery cell prices fluctuated slightly, with limited impact on the DC side. Overall, DC-side battery cabin prices remained stable. On March 10, the bid-winning candidates for the EPC general contracting of the 115.345MW/230.69MWh grid-side ESS project in Binhai New Area, Hai'an City, Jiangsu Province, were announced. The project is located in Binhai New Area, Hai'an City, Jiangsu Province. The first bid-winning candidate quoted 194.8844 million yuan, with a unit price of 0.8448 yuan/Wh. The second bid-winning candidate quoted 194.9428 million yuan, with a unit price of 0.845 yuan/Wh. 》Subscribe to view historical spot prices of SMM new energy products 》Click to view the SMM New Energy Industry Chain Database News: 【Ministry of Commerce: To Organize Pilot Reforms in Automotive Circulation and Consumption to Foster New Growth Points in Automotive Consumption】 Li Gang, Director of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce, stated at a press conference held by the State Council Information Office on the 17th that pilot reforms in automotive circulation and consumption will be organized. Local governments with favorable conditions will be actively supported to take the lead in promoting the efficient circulation of used cars and developing the automotive aftermarket, aiming to foster new growth points in automotive consumption. 【BTR: Current Anode Material Capacity at 575,000 mt/year】 BTR revealed during an investor relations event that the NEV and ESS lithium battery markets are growing rapidly in 2024, and the industry is expected to continue growing in the future. The company boasts an excellent and stable core team, a high-quality customer structure, comprehensive product advantages, and an entire industry chain layout, demonstrating significant competitiveness. Additionally, the company has made forward-looking arrangements in silicon-based anode materials, solid-state battery materials, and other fields, obtaining multiple patents. Currently, the company's anode material capacity stands at 575,000 mt/year, with plans to expand capacity in Indonesia and Morocco. 【Belgian Media: Cooperation With China Is the Solution for Europe's Battery Industry】 Belgium's "L'Echo" recently published an article stating that China achieved automotive manufacturing technology accumulation through cooperation with European companies in the past. Now, Europe urgently needs to learn from this development path in the battery sector. Facing reality, "if you can't beat them, join them" has become a consensus in Europe's EV industry chain, particularly in the battery sector. This cooperation mirrors China's past strategy of leveraging European automakers to achieve technological accumulation. With history repeating itself, it is now Europe's turn to humbly retrace this path of cooperation. SMM New Energy Research Team Cong Wang 021-51666838 Rui Ma 021-51595780 Ziya Lin 86-2151666902 Disheng Feng 021-51666714 Yanlin Lü 021-20707875 Zhicheng Zhou 021-51666711 Zihan Wang 021-51666914 Jie Wang 021-51595902 He Zhang 021-20707850 Haohan Zhang 021-51666752 Yang Xu 021-51666760 Boling Chen 021-51666836 Mengqi Xu 021-20707868