[SMM Cobalt & Lithium Morning Meeting Summary] Supply and demand under pressure, ternary cathode material prices fall

Lithium Ore:

At the beginning of this week, lithium ore prices continued to fall WoW. For spodumene, on the supply side, overseas miners maintained a firm stance on pricing, while traders, facing inventory pressure and capital turnover issues, continued to lower their quotations. 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 USD 720/mt CIF. Overall, large-scale lithium ore transactions in the market were relatively sluggish. Coupled with high inventory levels at ports, the pressure on suppliers to sell increased, leading to a continuous decline in spodumene prices.

Lithium Carbonate:

At the beginning of this week, spot lithium carbonate prices continued to decline. Judging from current market transactions, downstream enterprises showed relatively weak purchase willingness, with overall demand primarily met through customer-supplied and long-term contracted supplies. Upstream lithium chemical plants, under pressure from cost losses, demonstrated a strong willingness to stand firm on quotes. Currently, there were only sporadic transactions between traders and downstream enterprises. Considering the impact of the latest tariff policy, there may be some positive expectations for end-use demand, which could potentially drive a slight rebound in spot lithium carbonate prices. However, given that the cumulative inventory level in the market remains high, it is expected that spot lithium carbonate prices will continue to fluctuate.

Lithium Hydroxide:

At the beginning of this week, lithium hydroxide prices continued to decline. On the demand side, although some ternary cathode material plants recently saw a slight increase in orders, most demand was met through long-term contracts and customer-supplied supplies, 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 and a decline in transaction discounts amid continuous pressure from downstream buyers to drive down prices. Coupled with the sharp decline in lithium carbonate prices and the weakening of cost support due to falling lithium ore prices, the market price of lithium hydroxide fell more sharply. Currently, given the lack of significant expected increase in demand, lithium hydroxide prices are more likely to fall than rise.

Refined Cobalt:

This week, spot refined cobalt prices increased slightly. On the supply side, refined cobalt smelters continued to reduce production, and social inventory was still being digested. On the demand side, downstream producers' orders did not show significant recovery, and they maintained a purchasing rhythm based on production schedules, with limited willingness to purchase at high prices. However, some traders expected that subsequent policies in the DRC would be gradually introduced, leading to increased activity in speculative trading. It is expected that refined cobalt prices will hold up well this week.

Intermediate Products:

This week, spot prices of cobalt intermediate products increased slightly. On the supply side, mainstream miners continued to suspend spot order quotations, with only traders offering quotes, and they showed a strong willingness to stand firm on prices, resulting in relatively high overall quotations. Downstream producers had already completed raw material stocking, with weak inquiries and purchases, and a strong wait-and-see sentiment. It is expected that spot prices of cobalt intermediate products will remain relatively stable this week.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

Spot prices of cobalt sulphate remained stable. On the supply side, cobalt salt smelters continued to adopt a strategy to stand firm on quotes, with no price adjustments observed. Traders' quotations for their inventory were also relatively stable. On the demand side, inquiries from downstream producers decreased slightly, with a very strong wait-and-see sentiment. Currently, buyers and sellers are in a stalemate, with the market still awaiting subsequent guidance on the DRC's ban on sales. It is expected that spot prices of cobalt sulphate will maintain a fluctuating trend this week.

At the beginning of this week, cobalt chloride prices remained temporarily stable. From the supply perspective, the shortage of raw materials has not yet been resolved, with most manufacturers maintaining relatively high quotations and a low possibility of selling at low prices. On the demand side, the market appeared somewhat sluggish after the holiday, with fewer inquiries, primarily meeting rigid demand, and spot prices fluctuating at highs. If the market remains sluggish, the transaction price of cobalt chloride may decline. However, due to manufacturers' reluctance to sell, the extent of the price decline is expected to be limited.

Cobalt Salts (Co3O4):

At the beginning of this week, spot prices of Co3O4 declined. On the supply side, the market was relatively sluggish, with most smelters maintaining pre-holiday quotations but a decrease in transaction activity. On the demand side, some enterprises' acceptance of high-priced Co3O4 declined, leading to a decline in spot prices. It is expected that in the latter half of the month, as LCO cathode producers' inventory is gradually consumed, there may be a certain demand for restocking, triggering a new round of procurement. Therefore, the downside room for spot prices of Co3O4 may be limited, and it is more likely to fluctuate at highs.

Nickel Sulphate:

On May 12, the SMM battery-grade nickel sulphate index price was 27,863 yuan/mt, with a quotation range for battery-grade nickel sulphate of 27,860-28,370 yuan/mt, and the average price remained stable WoW. Cost side, the production of MHP in Indonesia in April was significantly affected by floods, resulting in a supply-demand gap and keeping its coefficient at a high level. Overall, MHP provided strong cost support. On the supply side, some nickel salt smelters had limited quantities available for external sale in May, leading to firm quotations. Some nickel salt smelters had expectations for production cuts due to incomplete raw material stocking. Moreover, with raw material prices fluctuating at highs, this pushed prices to remain firm. On the demand side, some precursor plants had relatively sufficient inventory, resulting in low purchase activity. However, some precursor plants still had procurement needs in May, and it is expected that inquiries will gradually start this week. Looking ahead, based on fundamental factors such as tight raw material supply, stable cost support, and downstream demand dependence, it is expected that nickel salt prices will show a mild upward trend in the short term.

Ternary Cathode Precursor:

On Monday, prices of 5-series and 6-series products in the ternary cathode precursor market declined slightly, while prices of 8-series products remained stable. In terms of raw material costs, prices of nickel sulphate and cobalt sulphate remained stable, while the price of manganese sulphate declined slightly, driving down the prices of medium- and low-nickel products. On the demand side, the overall performance of the large NEV precursor market was mediocre. Despite some order transfers among manufacturers, there was no significant increase in overall demand, which was still mainly supported by existing projects. Recently, orders for small NEV and consumer precursors have increased, mainly influenced by rising cobalt prices, with some downstream material plants choosing to stock up in advance, but the actual increase in demand was limited. On the supply side, affected by market fluctuations this year, NEV precursor producers generally no longer signed long-term (e.g., half-year or one-year) orders, instead opting for monthly discount negotiations. Some enterprises have increased the discount coefficient for long-term contracts, but downstream customers have low acceptance of the adjusted prices. Consumer precursors are still mainly sold through spot orders, with the discount coefficient remaining stable since April. Currently, precursor enterprises and downstream material plants are still in a price negotiation phase. Looking ahead this week, it is expected that prices of nickel sulphate and cobalt sulphate will continue to rise mildly, and driven by raw material costs, there may be a slight upside room for ternary cathode precursor prices.

Ternary Cathode Material:

On Monday, ternary cathode material prices continued to decline. In terms of raw materials, prices of nickel sulphate and cobalt sulphate remained stable overall, while the price of manganese sulphate declined slightly. In contrast, prices of lithium carbonate and lithium hydroxide fell further sharply, driving down the prices of various ternary cathode materials. On the demand side, the large NEV market performed steadily. Although individual automakers achieved good sales, providing some support for ternary cathode materials, the increase was limited. The traditional peak season for the consumer market has not yet arrived. Although some producers stocked up in advance due to rising cobalt prices, the overall increase in demand was still relatively limited. On the supply side, the current market supply mainly relies on previously signed long-term contracted orders, with some enterprises having increased the relevant discount coefficients. In terms of spot order transactions, manufacturers generally adopted a settlement method of negotiating discounts separately for raw materials such as nickel sulphate, cobalt sulphate, and lithium carbonate, with the discount coefficient for spot order quotations increasing slightly, but downstream acceptance was low. Recently, market transaction sentiment has been weak, mainly due to the continuous decline in lithium carbonate prices, with the market still holding a pessimistic outlook for its future, leading to weak willingness among ternary cathode material producers to sell. In addition, downstream battery plants have already completed some stocking, with low willingness to purchase in the short term. In terms of price trends, it is expected that nickel salt and cobalt salt prices may rise mildly in the future, while there is still significant downside room for lithium salt prices. Ternary cathode material prices will still be affected by fluctuations in raw material prices, with the possibility of further declines.

LFP:

This week, LFP prices continued to decline, falling by approximately 635 yuan/mt, largely influenced by changes in lithium carbonate prices, which dropped by about 2,700 yuan/mt in just three days. On the market side, material plants' overall production remained relatively stable this week, with some top-tier material plants experiencing a slight decrease in production due to adjustments in the supply chain structure and, on the other hand, 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 production slowly. In terms of price settlement, the average price of iron phosphate showed a slight upward trend in April, with some LFP plants expecting an increase in processing fees for Q2, but no substantive results were achieved after negotiations and discussions with downstream battery cell manufacturers. However, currently, the price of iron phosphate raw materials has started to decline, so there is an expectation of a certain price decrease for iron phosphate in May. Additionally, with some battery cell manufacturers expected to restart tenders in June, the probability of a price increase before that is low. Considering these two points, SMM expects that processing fees for Q2 will be difficult to increase.

Iron Phosphate:

This week, iron phosphate prices fluctuated slightly. On the raw material side, the price of industrial-grade MAP remained stable after the Labour Day holiday, and the price of phosphoric acid remained stable. In April, iron phosphate fell short of enterprises' expectations in terms of both price and production. In May, competition in the iron phosphate market continued to be fierce, making it difficult for enterprises to stand firm on prices. Some iron phosphate enterprises showed slightly insufficient confidence, so some enterprises plan to reduce production in May to cope with the current difficulties and stabilize the market supply-demand relationship.

LCO Cathode:

This week, the mainstream quotations for 4.2V/4.4V/4.5V LCO cathode in the market were 220,000 yuan/mt, 225,000 yuan/mt, and 236,000 yuan/mt, respectively. On the raw material side, battery-grade lithium carbonate continued its previous downward trend this week, and the price of Co3O4 declined slightly. Affected by raw material prices, the price of LCO cathode declined slightly this week. On the supply side, starting from April, top-tier enterprises fully released their capacity, with production steadily increasing and remaining at a high level. On the demand side, terminal manufacturers stocked up for the 618 shopping festival, driving an increase in battery cell manufacturers' procurement orders. In addition, affected by policies in the DRC, cobalt still has significant uncertainties, so LCO cathode producers are cautious about selling.

Anode:

This week, prices of some artificial graphite declined slightly. Cost side, the price of graphitisation tolling services remained relatively stable under the combined influence of supply and demand dynamics and cost factors. However, the price of raw material coke declined due to the continuous weakness in downstream demand. On the supply and demand side, the overall market performance was relatively stable. Affected by tariffs, the growth momentum in demand was insufficient. Anode enterprises' production increased slightly with the decline in raw material coke prices, but the increase in anode production was limited because the decline in coke prices did not cover the previous increase. Looking ahead, cost side, the price of raw material coke may continue to decline. Coupled with the reduction in electricity costs after the holiday, production costs will decrease. On the demand side, affected by uncertainties in international trade, procurement decisions by enterprises along the industry chain tend to be conservative. On the supply side, overcapacity in anode production remains severe. Therefore, it is expected that the price of artificial graphite will show a downward trend under the pressure of declining costs and market supply-demand imbalances.
This week, natural graphite prices remained stable. Cost side, the prices of core raw materials and processing remained steady, with no significant changes; supply and demand side, the overall operation rhythm was stable. With no significant variables in both supply-demand and cost sides, the trading activity in the natural graphite market was at a conventional level, and prices lacked driving factors. Looking ahead, the supply side is expected to remain abundant; the demand side, affected by external uncertainties such as tariff policies, has seen a strong wait-and-see sentiment among downstream players. In a market structure with ample supply and weakening demand expectations, natural graphite anode material prices may face some downward pressure.

Separator:

This week, lithium battery separator material prices remained stable, with mainstream quotations for wet-process separators (5um/7um/9um) at 1.59 yuan, 0.82 yuan, and 0.75 yuan, respectively; dry-process separators (12um/16um) were quoted at 0.46 yuan and 0.43 yuan.The sentiment for price increases among separator companies has been high since the beginning of the year, and with Q2 order negotiations underway, price trends are expected to show more significant changes soon. Supply side, after the expansion of wet-process separator companies, supply exceeds demand, and capacity utilization rates are relatively high; in the dry-process separator market, due to oversupply, companies have voluntarily limited capacity, and supply and demand are relatively balanced. Demand side, increased downstream end-use demand has driven up purchase orders from battery cell manufacturers.

Electrolyte

This week, electrolyte prices remained stable.Cost side, the prices of core raw materials such as LiPF6 and additives have declined, leading to a decrease in overall electrolyte manufacturing costs. Demand side, although the downstream new energy battery market has shown some recovery, the increase is relatively small. Faced with market uncertainties, downstream customers generally adopt cautious production and stockpiling strategies, purchasing as needed, resulting in insufficient market demand momentum and difficulty in significantly boosting the industry chain. Supply side, major industry players continue to deepen the "produce based on sales" operation model, flexibly adjusting capacity according to actual market demand. However, with electrolyte prices remaining low for an extended period, companies' profit margins are severely squeezed, and some companies, considering cost control and loss prevention, actively avoid orders with excessively low prices and significant losses, leading to a low overall industry operating rate. Comprehensive judgment, considering the difficulty in achieving substantial improvement in supply-demand relations in the short term and the lack of strong stimulus factors in the industry, electrolyte prices are expected to continue fluctuating rangebound for some time.

Sodium-ion battery:

This week, the sodium-ion battery industry achieved a milestone as the 10,000 mt polyanion production line in Huzhou Yingna officially commenced operation.The successful launch of this production line not only marks 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 upstream and downstream supporting projects in the sodium-ion battery industry chain, production lines for key components such as cathode and anode materials and battery cells will be successively completed and mass-produced. The emergence of scale effects will drive down sodium-ion battery production costs. Meanwhile, sodium-ion batteries, with their inherent high safety and excellent rate performance, 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, lithium and other salt products mainly experienced slight declines.This week, the coefficients for ternary and LCO black mass remained stable. 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 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. Supply side, the psychological selling prices of grinding mills and traders remain relatively firm, and some grinding mills, as their current profits are still below the surplus line, choose to hold back from selling, waiting for better market conditions, resulting in a more sluggish market performance compared to April. Demand side, most wet-process plants, amid the continuous decline in nickel, cobalt, and lithium salts, 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 and a half months of safety raw material inventory. Cost side, currently, except for leading integrated wet-process plants, most wet-process plants' profits remain below the surplus line, while grinding mills' profits are slightly better than wet-process plants, but some small and medium-sized grinding mills' profits continue to be inverted.

Downstream and end-use:

This week, DC-side battery cabin prices slightly declined.The average price for 5MWh DC-side battery cabins was 0.43 yuan/Wh; 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 down DC-side prices. Additionally, as the detailed rules for energy storage participation in the power market mechanism in various provinces have not yet been fully released, owners mostly adopt a wait-and-see attitude, and energy storage integrators compete for orders through low-price strategies, also contributing to the downward trend in DC-side battery cabin prices. Looking ahead, SMM expects that DC-side battery cabin prices may continue to decline in May.

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. The bid winner quoted 265.04 million yuan, with a converted unit price of 1.395 yuan/Wh.

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News:   

[China's Auto Production and Sales Both Exceeded 10 Million Units for the First Time from January to April] Data released by CAAM on the 12th shows that in April this year, China's auto production and sales reached 2.619 million and 2.59 million units, up 8.9% and 9.8% YoY, respectively, but down 12.9% and 11.2% MoM, respectively. In the first four months of this year, China's auto production and sales both exceeded 10 million units for the first time in history. According to statistics, from January to April this year, China's auto production and sales reached 10.175 million and 10.06 million units, up 12.9% and 10.8% YoY, respectively. Among them, NEV production and sales reached 4.429 million and 4.3 million units, up 48.3% and 46.2% YoY, respectively, with NEV new car sales accounting for 42.7% of total new car sales. In terms of exports, from January to April this year, auto exports reached 1.937 million units, up 6% YoY. Among them, NEV exports reached 642,000 units, up 52.6% YoY.
[National Vehicle Trade-in Subsidy Applications Surpass 10 Million] Data from the Ministry of Commerce shows that as of May 11, 2025, the number of vehicle trade-in subsidy applications reached 3.225 million, including 1.035 million for vehicle scrappage and renewal and 2.19 million for replacement and renewal. Since the implementation of the vehicle trade-in policy in 2024, the cumulative number of subsidy applications has exceeded 10 million. (CCTV News)
[CAAM: NEV Exports Reach 200,000 Units in April, Up 76% YoY] Data released by the China Association of Automobile Manufacturers (CAAM) indicates that in April, exports of traditional fuel vehicles stood at 317,000 units, down 9.3% MoM and 18.7% YoY; exports of NEVs reached 200,000 units, up 27% MoM and 76% YoY. From January to April, exports of traditional fuel vehicles totaled 1.295 million units, down 7.9% YoY; exports of NEVs amounted to 642,000 units, up 52.6% YoY.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Lin Ziya 86-2151666902

Feng Disheng 021-51666714

Lv 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

Xu Mengqi 021-20707868