【SMM Cobalt and Lithium Morning Meeting Minutes】Iron Phosphate Production Costs Decreased, Stand Firm on Quotes Strategy Proved Ineffective

Lithium Ore:

This week, lithium ore prices continued to decline slowly WoW. On the spodumene side, despite overseas mines maintaining a firm stance on quotes, the continuous decline in lithium carbonate futures and spot prices has led to a decrease in the acceptable price level for lithium concentrates among buyers. Some suppliers, due to pessimistic expectations for future market prices, have shown a strong willingness to sell, leading to continuously lower quotations. Although transaction volumes remain relatively low, there is a downward trend in the lower range of market prices. On the lepidolite side, the continuous decline in lithium carbonate prices has weakened the purchasing enthusiasm of buyers. Some smelters that externally purchase lepidolite have even planned to reduce or halt production, resulting in a continuous decline in the acceptable price level for lepidolite concentrates.

Lithium Carbonate:

This week, spot lithium carbonate prices fell significantly, with the weekly average price down by approximately 1,300 yuan/mt WoW. Demand side, May's demand did not meet the previous incremental expectations. When lithium carbonate prices were at low levels earlier, downstream material plants generally engaged in stockpiling purchases, making it unlikely to see large-scale pre-Labour Day holiday stockpiling behavior in the near future. Supply side, some upstream lithium chemical plants have recently reduced or halted production, leading to a decrease in lithium carbonate output. However, total output remains high, and the surplus pattern continues. Once positive market sentiment emerges, lithium chemical plants that have reduced or halted production may quickly resume production, indicating significant supply elasticity. Market news suggests that a lithium chemical plant, due to the breaking of its previously set floor price, is considering adjusting the volume of long-term contract shipments. In an extreme scenario where long-term contract shipments are entirely halted, the apparent demand for the month could cause short-term supply disruptions. However, considering the cumulative inventory levels of domestic lithium carbonate, spot prices are unlikely to gain upward momentum. Additionally, attention should be paid to the price trends of raw materials. If ore prices show a significant downward trend, the cost pressure on non-integrated lithium chemical plants will be somewhat alleviated. As the cost center shifts downward, lithium carbonate prices will also be dragged down.

Lithium Hydroxide:

This week, lithium hydroxide prices showed an increasing trend of decline WoW. With subdued market sentiment and no significant increase in domestic demand, lithium chemical plants, due to high inventory levels, have shown a stronger willingness to sell compared to earlier periods. Customs data indicates that export volumes have remained low in recent months, affecting the consumption of lithium hydroxide and increasing the sales pressure on domestic lithium chemical plants. The recent decline in ore prices has also weakened the cost support for lithium hydroxide. Overall, the discounts on spot transactions in the domestic upstream and downstream sectors have been declining. Coupled with the continuous decline in lithium carbonate prices, the decline in lithium hydroxide prices has intensified. Currently, with no significant increase in demand expected, lithium hydroxide prices are more likely to fall than rise.

Refined Cobalt:

This week, spot refined cobalt prices fluctuated upward. Supply side, social inventory remains high, but the inventory pattern is slightly different. Due to the high cost of raw materials, the economic viability of refined cobalt production is poor, and smelters have shown low enthusiasm for production, with some even reducing production. Demand side, downstream manufacturers' inquiry activity has slightly increased, but their willingness to stockpile at high prices remains low. Next week, refined cobalt prices are expected to maintain a fluctuating trend.

Intermediate Products:

This week, spot prices of cobalt intermediate products remained stable. Supply side, upstream manufacturers have generally suspended spot quotations to ensure supply to long-term contract customers, with some long-term contract delivery times being extended. Only a few traders are active in the market, leading to a limited overall supply. Downstream, a very small number of manufacturers are experiencing raw material shortages, and overall inquiry and buying activity has increased, leading to a slight recovery in actual transactions of cobalt intermediate products. Next week, the short-term supply-demand pattern is unlikely to improve, and spot prices of cobalt intermediate products may fluctuate upward.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

This week, spot cobalt sulphate prices remained stable. Supply side, some cobalt salt plants are experiencing slight raw material shortages, leading to a slight increase in quotations due to a reluctance to sell, but actual transactions have not shown significant improvement. Demand side, downstream manufacturers are generally adopting a wait-and-see attitude towards new supplies from salt plants, with some still digesting old social inventories. Next week, the short-term supply-demand situation is unlikely to improve significantly, and spot cobalt sulphate prices may continue to fluctuate.

This week, cobalt chloride prices rose slightly. Supply side, raw material inventories are increasingly tight, and most producers are refusing to sell at low prices, leading to higher quotations. Demand side, the just-in-time procurement by downstream cobalt tetroxide manufacturers has driven high-level transactions, leading to a slight increase in spot prices. Next week, although market activity remains low, suppliers' reluctance to sell remains strong, and cobalt chloride prices are expected to continue to fluctuate at high levels, with some room for further increase.

Cobalt Salts (Cobalt Tetroxide):

This week, cobalt chloride prices rose slightly. Supply side, raw material inventories are increasingly tight, and most producers are refusing to sell at low prices, leading to higher quotations. Demand side, the just-in-time procurement by downstream cobalt tetroxide manufacturers has driven high-level transactions, leading to a slight increase in spot prices. Next week, although market activity remains low, suppliers' reluctance to sell remains strong, and cobalt chloride prices are expected to continue to fluctuate at high levels, with some room for further increase.

Nickel Sulphate:

As of Thursday this week, the SMM battery-grade nickel sulphate index price was 27,808 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,820-28,340 yuan/mt, and the average price increased WoW. Cost side, the nickel coefficient in MHP remained high this week, providing strong cost support for nickel salt plants. Supply side, manufacturers using primary materials have maintained firm quotations this week, and manufacturers using recycled materials have also raised their quotations, with no extreme low-priced nickel sulphate available in the market. Demand side, this week marks the traditional procurement period for nickel salts in May, and precursor plants' purchasing sentiment for nickel sulphate has increased, leading to higher inquiry and transaction activity. Looking ahead, based on tight raw material supply, solid cost support, and dependent downstream demand, nickel salt prices are expected to show a mild upward trend in the short term.

Ternary Cathode Precursor:

This week, prices of 5-series for consumer electronics, 6-series for consumer electronics, and 8-series for NEV products in the ternary precursor market continued to rebound. In terms of raw material costs, nickel sulphate and cobalt sulphate prices rose slightly, and although manganese sulphate prices fell slightly, this did not offset the upward push on precursor prices from nickel and cobalt salts, leading to a rebound in prices of various series of precursor products. Demand side, overall market transaction sentiment was cold this week, with the ternary market lacking new demand drivers, and companies continued to execute production schedules and existing orders. The overall demand in April is expected to be similar to March. In terms of specific product models, mid-nickel products showed relatively better demand this month, and the market share of 6-series ternary precursors is expected to increase. Supply side, due to the long-term cost inversion of precursor products, companies have shown a strong willingness to stand firm on quotes, and transaction prices have remained firm. Considering the significant market fluctuations this year, manufacturers of precursors for NEV have generally stopped signing long-term orders (e.g., six months or one year) and instead adopted monthly negotiated discounts. Meanwhile, some manufacturers have increased the discount coefficient for cobalt sulphate. In the consumer precursor market, spot transactions still dominate. Looking ahead, sulphate prices are expected to rebound slightly, and precursor prices may rise slightly driven by the increase in raw material prices.

Ternary Cathode Material:

This week, ternary cathode material prices continued to decline. Although nickel sulphate and cobalt sulphate prices rose slightly, this did not offset the downward pressure from the significant decline in lithium carbonate and lithium hydroxide prices. Current market supply mainly relies on previously signed long-term contracts, and some companies have already increased the relevant discount coefficients. For spot transactions, manufacturers generally negotiate discounts on raw materials such as nickel sulphate and cobalt sulphate separately. In terms of production and order execution, production schedules and order deliveries are proceeding orderly, and overall supply is basically flat compared to March. Looking ahead to Q2, demand is expected to rebound compared to Q1, but the increase will be limited. In terms of product structure, mid-nickel ternary cathode material demand increased this month, and the market share of 6-series products is expected to further increase. In terms of end-use applications, small power ternary cathode material demand has been relatively active recently, while large power and consumer ternary cathode material demand has remained stable. Overall, the ternary market still lacks significant new demand drivers. In terms of prices, ternary cathode material prices are expected to be affected by raw material price fluctuations and show a slight fluctuating trend this week.

LFP:

This week, LFP prices overall showed a downward trend, dropping by approximately 400 yuan/mt, mainly due to the significant decline in lithium carbonate prices this week, which fell by approximately 1,550 yuan/mt. Market side: Supply side, material plants maintained stable production this week, with overall output in April increasing by 1%-2% compared to March. Demand side, downstream battery cell manufacturers' demand remained stable, with a slight increase compared to March, but the increase was relatively small. In late April, the overall cargo pick-up progress of battery cell manufacturers slowed down, and demand did not show a significant increase. In terms of price settlements, in April, material plants and battery cell manufacturers renegotiated the processing fee for Q2, but no actual progress was made. In May, overall output is expected to increase slightly, and material plants will continue to negotiate settlement prices with battery cell manufacturers.

Iron Phosphate:

This week, the iron phosphate market showed a relatively flat trend. Raw material side, industrial-grade MAP prices began to loosen, and ferrous sulphate prices have fallen to the 200-300 yuan range. As a result, the production cost of iron phosphate has decreased. However, as the month-end approaches, the strategy of standing firm on quotes for iron phosphate has been ineffective due to the lack of cost support. Meanwhile, the demand for iron phosphate in April did not meet expectations, and the market supply is sufficient, making it difficult for iron phosphate companies. In this situation, some companies plan to reduce production to cope with the current difficulties and stabilize the supply-demand relationship.

LCO:

This week, the LCO market continued to show a tug-of-war between supply and demand, with mainstream quotations for 4.2V/4.4V/4.5V LCO at 225,000 yuan/mt, 229,000 yuan/mt, and 239,000 yuan/mt, respectively. Supply side, with the completion of the resumption of work and production in the industry chain in March, industry capacity utilization has returned to high levels, and production schedules in April are expected to increase by 3% MoM. Demand side, Q2 is the peak season for 3C electronics consumption, which will drive increased procurement demand from battery cell manufacturers. In terms of prices, LCO prices are mainly affected by raw material prices, and this week, cobalt and lithium carbonate prices remained stable, so LCO prices have not changed much recently. Additionally, LCO manufacturers are currently adopting a wait-and-see attitude, indicating that they will not engage in large-scale shipments in the near future.

Anode:

This week, artificial graphite prices remained relatively stable. Supply-demand side, market demand lacks upward momentum, and downstream battery cell manufacturers' production schedules did not show significant growth WoW. The overall operating rate in the anode market remained at last week's level. Cost side, the price trends of various raw materials diverged, and the supply-demand and cost tug-of-war in the graphitisation tolling services market continued, with prices remaining firm. The price of raw material coke has declined due to low purchasing enthusiasm for anodes and cathodes. Considering the cost calculation of various raw materials, the production cost of anode materials decreased this week, but given that the raw materials used in current artificial graphite anode production were mostly purchased at high prices earlier, artificial graphite prices remained firm under cost support. Looking ahead, the trend of artificial graphite prices will continue to be affected by tariff policies, and the pace of demand expansion from downstream battery cell manufacturers will be somewhat suppressed. The rapid development of the domestic new energy market is expected to offset some of the negative effects of tariffs and effectively supplement market demand. Therefore, under the combined effect of relatively stable supply-demand relationships and cost support, artificial graphite prices are expected to remain stable in the short term.
This week, the price of natural graphite anode material remained stable. On the supply and demand side, the overall market performance was steady, with no significant changes in either the procurement scale on the demand side or the shipments on the supply side compared to last week, maintaining a relatively stable market condition. On the cost side, there were no significant fluctuations in upstream raw material prices this week. Looking ahead, influenced by tariff policies, downstream demand may decline, and it is expected that the price of natural graphite anode material will face downward pressure. Separator: This week, the price of lithium battery separator materials remained stable, with mainstream quotations for wet-process separators of 5um/7um/9um at 1.59 yuan, 0.82 yuan, and 0.75 yuan, respectively; and for dry-process separators of 12um/16um at 0.46 yuan and 0.43 yuan. On the supply side, with the completion of industry chain resumption and production in March, the capacity utilization rate has recovered, and a slight increase in production schedule is expected in April. On the demand side, the growing demand for NEV and ESS continues to drive battery cell manufacturers' procurement of separators. Price-wise, as separator prices have already approached the cost line, it is expected that separator prices will remain stable in the near term. Electrolyte: This week, the market price of electrolyte decreased. On the cost side, the prices of core raw materials such as LiPF6, solvents, and additives all declined, leading to a reduction in the overall manufacturing cost of electrolyte. On the demand side, the recovery of the downstream new energy battery market continues to fall short of expectations, and recent changes in tariff policies have further dampened market demand. End-users, considering market uncertainties, continue to adopt cautious stockpiling strategies, strictly controlling inventory levels, resulting in low market activity and weak demand support. On the supply side, major industry players continue to deepen the "produce based on sales" operation model, adopting conservative production schedules based on cautious market demand forecasts. Meanwhile, some small and medium-sized producers, constrained by the sluggish market demand, face insufficient orders and low operating rates. Comprehensive analysis of the current electrolyte market landscape suggests that, given the lack of fundamental changes in supply and demand fundamentals in the short term, there is no key factor driving significant price fluctuations. It is expected that electrolyte prices will continue to fluctuate within a narrow range in the near future. Sodium-ion Battery: This week, the sodium-ion battery market remained stable with moderate trading activity. CATL held a Super Technology Day event, launching the "Sodium New" sodium-ion battery brand and related products, with its power sodium-ion battery achieving an energy density of 175Wh/kg, set for mass production in December, attracting market attention. With the gradual deployment of supporting production lines for sodium-ion battery cathode and anode materials and battery cells in 2025, if mass production is achieved, sodium-ion battery costs are expected to decrease, further enhancing market competitiveness. Recycling: On the supply side, this week, prices of lithium salts, nickel salts, and cobalt salts mainly declined. The coefficients for ternary and LCO black mass remained basically stable, with the coefficient for ternary pole piece black mass currently at 75-78%, and for ternary battery black mass at 72-75%. On the supply side, the psychological selling prices of grinding mills and traders have decreased with the decline in salt prices, but some grinding mills, still operating below the surplus line, choose to hold back from selling, waiting for better market conditions, resulting in a more sluggish market performance compared to March. On the demand side, most wet-process plants, amid the continuous decline in nickel, cobalt, and lithium salt prices, only make just-in-time procurement of black mass, and due to the pessimistic market outlook on future lithium salt prices, they only maintain about one month's worth of safety raw material inventory. On the cost side, except for leading integrated wet-process plants, most wet-process plants still operate below the surplus line, while grinding mills perform slightly better than wet-process plants, but the recent decline in copper cathode prices has also led to sustained losses in grinding mills. Downstream and Terminal: This week, the price of DC-side battery cabins remained stable. The average price of 5MWh DC-side battery cabins was 0.43 yuan/Wh; the average price of 3.44/3.77MWh DC-side battery cabins was 0.438 yuan/Wh. Domestic ESS projects are scheduled on demand, with minimal price fluctuations for DC-side battery cabins. On April 22, the winning bid result for the EPC general contract of the Heshan Suoying Xinneng Common Mode 300MW/900MWh ESS Power Station Project was announced. The project is located in Heshan City, Laibin City, Guangxi Zhuang Autonomous Region, with an ESS capacity of 300MW/900MWh, and includes the construction of a booster station with a building area of 7,500㎡ and a main transformer low-voltage side voltage of 35kV. The bid winner's quotation was 1.305 billion yuan, with a converted unit price of 1.45 yuan/Wh. Order to view SMM new energy product spot historical prices. Click to view SMM new energy industry chain database. News: [Ministry of Commerce Talks on Progress of China-EU Auto Negotiations: China Willing to Properly Handle Economic and Trade Frictions with EU Through Dialogue and Consultation] On the afternoon of April 24, the Ministry of Commerce held a regular press conference. Reporter: China and the EU previously agreed to immediately start negotiations on EV price commitments and discuss investment cooperation in the auto industry. Can the Ministry of Commerce disclose the current progress of the negotiations? Ministry of Commerce Spokesperson He Yadong: Since the video meeting between Minister Wang Wentao and EU Trade and Economic Security Commissioner Šefčovič on April 8, the technical teams of China and the EU have maintained close communication on EV price commitments and trade and investment cooperation issues, and are accelerating the negotiation process. China is willing to work with the EU to properly handle economic and trade frictions through dialogue and consultation, deepen bilateral practical cooperation, and inject more certainty and positive energy into the Chinese, European, and world economies. [Honda Motor: Will Jointly Develop LFP Batteries with CATL] Honda Motor stated that it will cooperate with CATL to jointly develop an efficient platform for placing batteries directly in the auto body; will jointly develop LFP batteries with CATL, and plans to adopt this battery in the upcoming third-generation YE series models. (Cailian Press) [Tesla's Q1 Sales in Europe Plunge 45%] Data released by the European Automobile Manufacturers Association on the 24th shows that in the first three months of this year, new car registrations in the EU fell by 1.9% YoY. The market share of EVs and hybrid vehicles continues to expand, but the share of traditional internal combustion engine vehicles has significantly shrunk. Data shows that in Q1, gasoline car registrations fell by 20.6% YoY to 779,000 units, with the share dropping to 28.7%. Diesel car registrations fell by 27.1%, with the market share dropping to 9.5%. Pure EV registrations in Q1 increased by 23.9% to 413,000 units, accounting for 15.2% of the total market share, up from 12% in the same period last year. Data shows that in Q1, the new car sales of US EV manufacturer Tesla in Europe fell by 45% YoY. 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 Bolin Chen 021-51666836 Mengqi Xu 021-20707868