[SMM Cobalt & Lithium Morning Meeting Summary] Artificial graphite prices fall, likely to continue declining

Lithium Ore:

This week, lithium ore prices continued to fall WoW. For spodumene, on the supply side, overseas miners maintained a firm stance on pricing, with CIF quotes at $750/mt and above. Traders, facing inventory pressure and cash flow constraints, adjusted their quotes downward. On the demand side, given the sharp decline in lithium carbonate prices and the lack of significant improvement in losses, there was weak willingness to purchase lithium ore priced above CIF $730/mt. Overall, bulk lithium ore transactions in the market were mediocre. Coupled with high inventory levels at ports, the selling pressure on the supply side continued to increase, leading to a continuous decline in spodumene prices.
For lepidolite, as lithium carbonate prices continued to decline, the production enthusiasm of non-integrated lepidolite smelters in operation weakened. The acceptable prices for lepidolite concentrate continued to fall, driving market prices lower.

Lithium Carbonate:

This week, lithium carbonate prices fell significantly, with a decline of around 1,800 yuan/mt. On the demand side, as the proportion of customer-supplied materials from top-tier battery cell manufacturers continued to rise, downstream material plants showed weak willingness to purchase spot orders, generally adopting a wait-and-see attitude, anticipating further price declines. This led to overall weak market demand. From the supply side, although some lithium chemical plants have reduced or suspended production due to cost pressure, the strong supply from first- and second-tier lithium chemical plants kept total lithium carbonate output at a high level. Coupled with a large cumulative inventory of lithium carbonate, the significant surplus continued to drag down spot lithium carbonate prices. In terms of market transactions, the sharp decline in lithium carbonate prices triggered a sentiment to stand firm on quotes among upstream lithium chemical plants, with extremely weak willingness to sell. Downstream players also generally adopted a wait-and-see attitude, with only a few material plants and traders achieving limited transactions. Overall, the lithium carbonate market saw mediocre transactions and low market activity.

Lithium Hydroxide:

This week, the decline in lithium hydroxide prices accelerated. On the demand side, although some ternary cathode materials saw planned incremental production recently, the overall increase was relatively small. Most purchases of lithium hydroxide were through long-term contracts and customer-supplied materials, with limited spot purchases. On the supply side, most enterprises maintained relatively stable production rhythms, with generally high inventory levels. Meanwhile, there was a certain degree of pessimism about the future market, leading to a loosening of the stance to stand firm on quotes in the face of continuous downward pressure on prices from downstream players. This resulted in transaction discounts falling to 95% or below. Coupled with the sharp decline in lithium carbonate prices and the weakening of cost support due to falling lithium ore prices, the decline in lithium hydroxide market prices intensified. Currently, given the lack of expectations for a significant increase in demand, lithium hydroxide prices are more likely to fall than rise.

Refined Cobalt:

This week, spot refined cobalt prices remained stable. On the supply side, social inventory in the market remained high. Due to sustained high raw material costs, the economic viability of refined cobalt production continued to decline, leading to ongoing production cuts by smelters. On the demand side, downstream producers maintained a production schedule based on demand, with weak enthusiasm for stockpiling and a strong wait-and-see sentiment. It is expected that next week, refined cobalt prices may maintain a fluctuating trend.

Intermediate Products:

This week, spot prices for cobalt intermediate products remained stable. On the supply side, mainstream miners continued to supply long-term contracts and suspended spot quotes. Currently, only trader-sourced materials are circulating in the market, with traders maintaining relatively high quotes. After downstream producers completed some restocking in the previous period, their purchase willingness declined this week, with a strong wait-and-see sentiment in the market, resulting in limited spot transactions of cobalt intermediate products. It is expected that next week, with no significant improvement in short-term supply and demand expected, spot prices for cobalt intermediate products may remain relatively stable.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

Spot prices for cobalt sulphate declined slightly. On the supply side, cobalt salt smelters continued to adopt a strategy to stand firm on quotes. However, some recycling plants slightly lowered their cobalt sulphate quotes due to financial pressure. Social obsolete inventory decreased slightly, with low-priced old stocks being gradually absorbed by the market. On the demand side, downstream producers showed a strong wait-and-see sentiment, with extremely mediocre market inquiries. It is expected that in the near future, if the DRC introduces follow-up policies on cobalt, it may stimulate downstream producers to make purchases, potentially leading to a rebound in spot cobalt sulphate transactions.

This week, cobalt chloride prices remained stable for the time being. On the supply side, due to unresolved raw material shortages, most producers maintained relatively high quotes, with little possibility of low-priced sales. On the demand side, the post-holiday market was slightly sluggish, with few inquiries and purchases mainly driven by rigid demand. Spot prices fluctuated at highs. It is expected that next week, if the market continues to be sluggish, cobalt chloride transaction prices may decline slightly. However, due to producers' reluctance to sell, the price decline is expected to be limited.

Cobalt Salts (Co3O4):

This week, spot prices for Co3O4 declined. On the supply side, the post-holiday market was relatively sluggish. Most smelters maintained their pre-holiday quotes, but transaction activity weakened. On the demand side, some enterprises had already completed necessary procurement tasks, with decreased acceptance of high-priced Co3O4, leading to a decline in spot prices. It is expected that next week, as LCO cathode manufacturers gradually consume their inventory and may generate certain restocking demand, a new round of procurement may be triggered. Therefore, the downward space for Co3O4 spot prices may be limited, with prices more likely to fluctuate at highs.

Nickel Sulphate:

This week, outside the traditional procurement period, the nickel salt market saw low activity. As of Wednesday this week, the SMM battery-grade nickel sulphate index price was 27,857 yuan/mt, with the average price slightly increasing WoW. On the supply side, tight supplies of MHP and high-grade nickel matte kept their coefficients at high levels. Nickel salt smelters maintained a firm stance on nickel salt prices due to strong cost support. On the demand side, as precursor plants had already procured relatively sufficient inventory by the end of April, their purchase enthusiasm was low this week. However, precursor plants still have restocking needs this month, and the limited market circulation of nickel sulphate produced from low-priced recycled materials has increased their acceptance of nickel salt prices. Looking ahead, based on solid raw material cost support and downstream demand dependence, nickel salt prices are expected to show a mild upward trend in the short term.

Ternary Cathode Precursor:

This week, in the ternary cathode precursor market, prices for 5-series consumer-grade products declined, while prices for 6-series consumer-grade and 8-series NEV-grade products increased slightly. In terms of raw material costs, nickel sulphate prices increased slightly, while cobalt sulphate and manganese sulphate prices declined slightly. Due to the high proportion of cobalt sulphate in 5-series ternary cathode precursors, their prices fell due to the decline in cobalt sulphate prices. In contrast, prices for 6-series and 8-series precursors increased slightly due to the high proportion of nickel sulphate. On the demand side, the market for NEV-grade precursors remained relatively stable. Although there was order transfer among manufacturers, overall demand did not fluctuate significantly, mainly supported by existing projects. In comparison, demand for small power and consumer-grade precursors performed well recently, but their limited overall scale had a relatively limited boosting effect on overall market demand. On the supply side, due to significant market fluctuations this year, NEV-grade precursor producers generally no longer signed long-term orders (such as half-year or one-year contracts), instead adopting monthly discount negotiations for transactions. A few enterprises have increased the discount coefficients for long-term contracts. Consumer-grade precursors are still mainly sold through spot orders, with no significant changes in discount coefficients since April. Precursor plants and downstream material plants are still engaged in price negotiations. Looking ahead to next week, it is expected that nickel sulphate and cobalt sulphate prices will continue to rise mildly, and ternary cathode precursor prices may increase slightly further driven by raw material costs.

Ternary Cathode Material:

This week, ternary cathode material prices continued to decline. In terms of raw materials, nickel sulphate prices increased slightly, while cobalt sulphate and manganese sulphate prices declined slightly. Lithium carbonate and lithium hydroxide prices fell sharply, leading to overall weakness in ternary cathode material prices across all series. Currently, market supply mainly relies on previously signed long-term contracts, with some enterprises increasing relevant discount coefficients. In spot transactions, producers generally settled by negotiating discounts separately for raw materials such as nickel sulphate, cobalt sulphate, and lithium carbonate. In terms of production and order execution, the overall demand for NEV-grade ternary cathode materials remained relatively stable, but the market share of different series products adjusted to some extent. High-nickelization remains the long-term development direction of ternary cathode materials, although the pace of advancement has slowed. Benefiting from dual advantages in cost and performance, medium-nickel high-voltage products have recently gained more market attention. In the future, 6-series ternary cathode materials may squeeze the market share of 8-series materials. Orders for consumer-grade and small power NEV-grade ternary cathode materials have performed well recently, mainly driven by two factors: first, the seasonal increase in demand for consumer products; second, the accelerated transformation of downstream power tools and other products towards high-endization, driving demand growth for high-performance ternary cathode materials. In terms of price trends, it is expected that nickel salt and cobalt salt prices will rise mildly in the future, while lithium salt prices may still weaken significantly. Ternary cathode material prices may continue to be influenced by fluctuations in raw material prices and decline further.

LFP:

This week, LFP prices continued to fall, declining by approximately 635 yuan/mt, largely influenced by changes in lithium carbonate prices, which fell by about 2,700 yuan/mt in just three days. In the market, overall production by material plants remained relatively stable this week. Some top-tier material plants slightly reduced their output due to adjustments in the supply chain structure and the impact of US tariff policies and the cancellation of mandatory energy storage allocation in China, leading to a certain decrease in ESS orders. However, second- and third-tier material plants continued to increase output slowly. In terms of price settlement, the average price of iron phosphate showed a slight upward trend in April. Some LFP plants had expectations for an increase in processing fees in Q2, but no substantive results were achieved after negotiations and discussions with downstream battery cell manufacturers. However, given the current decline in iron phosphate raw material prices, there is an expectation for a price decrease in iron phosphate in May. Additionally, with some battery cell manufacturers planning to restart tenders in June, the probability of a price increase before then is low. Considering these two points, SMM expects that processing fees in Q2 will be difficult to increase.

Iron Phosphate:

This week, iron phosphate prices fluctuated slightly. On the raw material side, industrial-grade MAP prices remained stable after the Labour Day holiday, and phosphoric acid prices held steady. In April, iron phosphate production and prices fell short of enterprise expectations. Competition in the iron phosphate market remained intense in May, making it difficult for enterprises to stand firm on quotes. Some iron phosphate enterprises lacked confidence and planned to reduce production in May to cope with the current difficulties and stabilize market supply and demand.

LCO Cathode:

This week, mainstream quotes for 4.2V/4.4V/4.5V LCO cathode in the market were 221,000 yuan/mt, 226,000 yuan/mt, and 237,000 yuan/mt, respectively. On the raw material side, battery-grade lithium carbonate continued its downward trend this week, and Co3O4 prices declined slightly. Influenced by raw material prices, LCO cathode prices fell slightly this week. On the supply side, since April, top-tier enterprises have fully released their capacity, with stable and high output. On the demand side, terminal manufacturers stocked up for the 618 shopping festival, driving an increase in purchase orders from battery cell manufacturers. In addition, influenced by DRC policies, cobalt still faces significant uncertainties, so LCO cathode producers are cautious about selling.

Anode:

This week, prices for some artificial graphite declined slightly. On the cost side, graphitisation tolling service prices remained relatively stable under the combined influence of supply and demand dynamics and cost factors. However, raw material coke prices declined due to sustained weak downstream demand. On the supply and demand side, the overall market performance was relatively stable. Demand growth was insufficient due to tariff impacts, and anode enterprise output increased slightly with the decline in raw material coke prices. However, as the decline in coke prices did not cover previous increases, the increase in anode output was limited. Looking ahead, on the cost side, raw material coke prices may continue to decline. Coupled with a decrease in electricity costs after the holiday, production costs will decrease. On the demand side, influenced by uncertainties in international trade, procurement decisions by upstream and downstream enterprises in the industry chain have become more conservative. On the supply side, overcapacity in the anode sector remains severe. Therefore, it is expected that artificial graphite prices will continue to decline under the combined pressure of falling costs and supply-demand imbalances in the market.
This week, the price of natural graphite remained stable. On the cost side, the prices of core raw materials and processing costs remained steady, with no significant changes observed. The overall operation of the supply and demand sides was also stable. With no significant variables on either the supply and demand sides or the cost side, the market activity for natural graphite remained at a conventional level, lacking driving factors for price changes. Looking ahead, the supply side is expected to remain abundant. On the demand side, affected by external uncertainties such as tariff policies, downstream players are adopting a wait-and-see attitude. Given the market dynamics of sufficient supply and weakening demand expectations, the price of natural graphite anode materials may face some downward pressure.

Separator:

This week, the prices of lithium battery separator materials remained stable. The mainstream quotations for wet-process separators of 5um/7um/9um were 1.59 yuan, 0.82 yuan, and 0.75 yuan, respectively. For dry-process separators of 12um/16um, the mainstream quotations were 0.46 yuan and 0.43 yuan, respectively.Separator companies have had a strong sentiment for price increases since the post-Lunar New Year period. Currently, as negotiations for Q2 orders are underway, significant price changes are expected in the near future. On the supply side, following the expansion of wet-process separator companies, the supply of separators has exceeded demand, with relatively high capacity utilization rates across the board. In the dry-process separator market, due to oversupply, companies have voluntarily restricted their production capacities, resulting in a relatively balanced supply and demand situation. On the demand side, increased downstream end-use demand has driven an increase in purchasing orders from battery cell manufacturers.

Electrolyte

This week, the price of electrolytes declined.On the cost side, the prices of core raw materials such as LiPF6, solvents, and additives all decreased, leading to a reduction in the overall manufacturing cost of electrolytes. On the demand side, although the downstream new energy battery market has shown some signs of recovery, the growth has been relatively small. Affected by recent tariff policy adjustments, the release of end-use market demand has been hindered. Facing uncertainties in the market environment, downstream customers have generally adopted cautious production and stockpiling strategies, adhering to the principle of purchasing as needed. This has resulted in insufficient momentum in overall market demand, making it difficult to form a significant boosting effect on the industry chain. On the supply side, major companies in the industry continue to deepen the "produce based on sales" operational model, flexibly adjusting production capacities according to actual market demand. However, with electrolyte prices remaining low for an extended period, corporate profit margins have been severely squeezed. Some companies, out of cost control and loss mitigation considerations, have proactively avoided orders with excessively low prices and significant losses, resulting in a low overall operating rate in the industry. Based on a comprehensive assessment, considering that substantial improvements in the supply-demand relationship are unlikely in the short term and the industry lacks strong stimulating factors, it is expected that electrolyte prices will continue to decline slowly in the coming period.

Sodium-ion Battery:

This week, the sodium-ion battery industry achieved a milestone development, with the official commissioning of Huzhou Yingna's 10,000 mt-class polyanion production line.The successful implementation of this production line not only represents a significant breakthrough in the industrialization of sodium-ion battery technology but also injects strong momentum into the large-scale commercial application of sodium-ion batteries. With the accelerated layout of supporting projects along the sodium-ion battery industry chain, production lines for key components such as anode and cathode materials and battery cells will be successively completed and achieve mass production. The realization of economies of scale will drive the continuous reduction of sodium-ion battery production costs. Meanwhile, leveraging their inherent core advantages such as high safety and excellent C-rate performance, sodium-ion batteries will further enhance their competitiveness in niche markets such as energy storage and low-speed vehicles, reshaping the competitive landscape of the new energy battery industry.

Recycling:

Supply Side: This week, prices of salt products such as lithium chemicals, nickel salts, and cobalt salts mainly declined slightly.This week, the black mass coefficients for both ternary and LCO slightly decreased. Taking ternary black mass as an example: the current coefficient for ternary pole piece black mass is 75-78%, and for ternary battery black mass, it is 72-75%. The lithium point value for LFP pole piece black mass is 2,550-2,700 yuan/mtu, and for LFP battery black mass, it is 2,250-2,400 yuan/mtu. On the supply side, the psychological selling prices of grinding mills and traders have decreased with the decline in salt prices. However, some grinding mills, still operating below the profit margin, have chosen to hold back from selling, waiting for market conditions to improve. Market transactions have been sluggish compared to April on a MoM basis. On the demand side, most wet-process plants have only made just-in-time procurements of black mass amid the continuous decline in nickel, cobalt, and lithium salt prices. Given the market's pessimistic outlook on future lithium salt prices, they have only stockpiled about one month's worth of safe raw material inventory. On the cost side, except for leading integrated wet-process plants, most wet-process plants are still operating below the profit margin. While the profit margin of grinding mills is slightly better than that of wet-process plants, the recent decline in copper and aluminum prices has led to a continuous inversion in grinding mill profits.

Downstream and End-users:

This week, the prices of DC-side battery cabins slightly declined.The average price for 5MWh DC-side battery cabins was 0.43 yuan/Wh, while for 3.44/3.77MWh DC-side battery cabins, it was 0.438 yuan/Wh. The continuous decline in lithium carbonate prices has provided room for cost reduction in battery cells, indirectly driving the compression of DC-side prices. Additionally, with the detailed rules for energy storage participation in the power market mechanism not yet fully introduced in various provinces, owners are adopting a wait-and-see attitude. Energy storage integrators are competing for orders through low-price strategies, which has also contributed to the downward trend in DC-side battery cabin prices. Looking ahead, SMM expects that the prices of DC-side battery cabins in May may continue to decline.

On May 7, the winning bid result for the 95MW/190MWh shared energy storage power station project in Taixing Economic Development Zone was announced. The project is located in Taixing Economic Development Zone, Taizhou City, Jiangsu Province. The project plans to build a new 95MW/190MWh independent shared energy storage power station, using LFP batteries for energy storage. The bid winner's quotation was 265.04 million yuan, which translates to a unit price of 1.395 yuan/Wh after conversion.

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News:   

[CATL: Tianxing becomes the first batch of commercial power batteries to pass the new national standard test] CATL announced that on May 7, its Tianxing B-Bus Series, Tianxing H-Heavy Commercial Vehicle Series, and Tianxing L-Light Commercial Vehicle Series battery packs passed the GB 38031-2025 "Safety Requirements for Power Batteries for Electric Vehicles" test at authoritative third-party testing institutions such as China Merchants Vehicle Research Institute, China Automotive Technology and Research Center, and Shanghai Motor Vehicle Inspection Certification & Tech Innovation Center, becoming the first batch of commercial power batteries in China to meet this standard. (Financial Associated Press)
【Ford Raises Prices of Three Car Models by Up to $2,000 Due to Tariff Impact】The US government's tariff policies have dealt a blow to established US automakers. According to media reports from outlets such as ABC, Ford Motor Company announced on the 7th (local time) that it would increase the prices of three car models produced in Mexico, citing the US's tariff hikes on imported cars as one of the reasons for the price adjustments. Ford's statement to the media revealed that the company would raise the prices of its pickup truck "Maverick," SUV "Bronco Sport," and electric vehicle "Mach-E," with the maximum increase reaching $2,000. This price hike applies to imported vehicles produced after May 2. (Cailian Press)
【CAAM: Total Import and Export Value of Automotive Products Increased by 32.1% MoM in March】According to data compiled by the China Association of Automobile Manufacturers (CAAM) from the General Administration of Customs, in March 2025, the total import and export value of automotive products reached $23.82 billion, up 32.1% MoM and down 0.2% YoY. The import value was $3.67 billion, up 3.8% MoM and down 30.4% YoY, while the export value was $20.15 billion, up 38.9% MoM and up 8.4% YoY. From January to March 2025, the cumulative total import and export value of automotive products nationwide was $65.14 billion, down 4.6% YoY. The import value was $10.14 billion, down 35.6% YoY, while the export value was $55 billion, up 4.6% YoY. (Cailian Press)

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

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Lü Yanlin 021-20707875

Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

Wang Jie 021-51595902

Zhang He 021-20707850

Zhang Haohan 021-51666752

Xu Yang 021-51666760

Chen Bolin 021-51666836

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