[SMM Cobalt and Lithium Morning Meeting Summary] Lithium and Cobalt Salt Prices Fall, Lithium Battery Scrap Market Sees Sluggish Transactions

Lithium Ore:

This week, lithium ore prices continued to decline WoW. On the supply side, despite some overseas mines' willingness to hold firm on quotes, they lowered their offers due to selling pressure. On the demand side, with current lithium chemical prices at a low level, buyers' psychological price levels continued to drop, resulting in weak purchase willingness for lithium ore priced at CIF US$650/mt or above. As spot and futures prices of lithium carbonate fell, demand continued to push prices down, and transaction willingness remained relatively low.
According to this week's lithium ore import customs data, domestic spodumene imports exceeded 600,000 mt in April, showing a significant WoW increase, equivalent to over 50,000 mt of LCE. Coupled with high port inventory levels in recent months, traders and mines faced selling pressure, enhancing buyers' bargaining power. With lithium chemical prices remaining low, there is an expectation of weakening lithium ore prices.

Lithium Carbonate:

This week, spot lithium carbonate prices continued to decline, showing an overall fluctuating downward trend. From the supply side, some enterprises showed signs of maintenance and production cuts, with weekly output levels weakening. However, with the emergence of hedging opportunities amid a slight rebound in the futures market, some non-integrated lithium chemical plants may resume production or show signs of increased output. Overall, while production cuts due to maintenance have somewhat suppressed total lithium carbonate output, overall supply is expected to remain at a relatively high level. Although downstream demand also saw some growth in May, due to the large proportion of customer-supplied and long-term agreement volumes, and with prices continuing to fall, downstream material plants generally adopted a cautious wait-and-see attitude, making it difficult for spot orders to support market confidence. From the raw material ore side, prices also continued to decline, and no mines have announced production cuts or suspensions. With cost support weakening, lithium carbonate prices lack upward momentum. Against the backdrop of an unchanged oversupply situation in supply and demand, the lithium carbonate market will continue to face downward pressure in the short term.

Lithium Hydroxide:

This week, lithium hydroxide prices continued to decline. Most demand-side purchases of lithium hydroxide from enterprises are mainly through long-term agreements and customer-supplied materials, so even with some incremental demand in orders, there is little spot purchasing. On the supply side, most enterprises have maintained relatively stable production rhythms recently, with generally high inventory levels. Continuous downward pressure on prices from downstream enterprises has somewhat loosened their stance on holding firm on quotes, leading to lower transaction discounts and driving lithium hydroxide prices down. Additionally, according to customs data, lithium hydroxide exports in April remained at a relatively low level, basically flat WoW, mainly due to weak overseas demand and some overseas lithium hydroxide orders being shifted to domestic shipments. In summary, with no significant expected increase in demand in the near term and weakened cost support on the supply side, coupled with the downward pull of falling lithium carbonate prices, lithium hydroxide prices are more likely to fall than rise.

Refined Cobalt:

This week, spot refined cobalt prices fell significantly. From the supply side, the market is still digesting social inventory, with the economic viability of refined cobalt production continuing to decline, and smelters likely to continue cutting production. In terms of quotations, traders' offers have continued to decline in line with the futures market. Recently, some traders have exited the market and sold off inventory due to financial cost pressures. From the demand side, amid falling prices, downstream producers' purchase situations have slightly improved, with inquiries and buying interest warming up. It is expected that next week, spot refined cobalt prices may continue to fluctuate.

Intermediate Products:

Currently, the market circulation of intermediate products is still dominated by traders' goods, with relatively high quotations maintained. On the demand side, due to uncertainty about subsequent policies in the DRC, downstream producers are generally dominated by wait-and-see sentiment. This week, inquiries and buying interest were slightly weak, and spot transactions of cobalt intermediate products were sluggish. It is expected that in the near term, cobalt intermediate products may continue to operate relatively steadily.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

This week, spot cobalt sulphate prices declined. From the supply side, spot quotations for cobalt sulphate from both smelters and recycling plants have fallen, with actual transactions mainly consisting of sporadic small orders, and transaction prices further declining. From the demand side, overall purchasing sentiment among downstream producers is poor. With some ternary precursor plants experiencing slight order reductions, overall stockpiling demand is weak. Additionally, with some LCO producers having built up inventory earlier, short-term LCO sales have slowed slightly, further reducing producers' purchase willingness. Currently, market transactions are mainly sporadic small orders, with no significant volume-based purchasing activity observed. It is expected that next week, spot cobalt sulphate prices may continue to fluctuate weakly.

This week, cobalt chloride prices remained firm. From the supply side, due to ongoing raw material shortages, smelters have a strong willingness to support prices, with a more pronounced reluctance to sell, and almost no instances of low-price sales. From the demand side, downstream enterprises have certain rigid purchasing needs. Influenced by expectations of price increases, inquiries have increased, and a small number of high-price transactions have occurred. It is expected that next week, with the continuous depletion of market inventory, spot cobalt chloride prices will remain high and may rise further.

Cobalt Salts (Co3O4):

This week, Co3O4 prices fell sharply. From the supply side, despite smelters maintaining relatively stable quotations, their willingness to sell has increased, with a significant reduction in the phenomenon of holding back from selling. On the demand side, downstream LCO producers have differing opinions on market prospects, with a strong wait-and-see sentiment, only making necessary purchases to meet daily production needs. Influenced by the decline in LCO prices, it is common for producers to drive down prices when purchasing raw materials, with weak stockpiling willingness. Against the backdrop of overall market weakness, there have been individual instances of low-price transactions. It is expected that the peak in Co3O4 purchases has not yet arrived next week, and spot prices will continue to fall.

Nickel Sulphate:

As of Thursday this week, the SMM battery-grade nickel sulphate index price was 27,800 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,760 to 28,270 yuan/mt, and the average price slightly higher WoW.
In terms of demand-side performance, after industry destocking in May, some precursor production enterprises' production schedules for June have become more optimistic, with significantly increased inquiries for nickel sulphate and enhanced acceptance of nickel salt prices. From the supply side, some nickel salt production enterprises have raised their product quotation coefficients due to increased demand and tight raw material inventory, while others have maintained stable quotations.
Looking ahead, considering that next week will mark a traditional procurement period, coupled with cost support factors, nickel salt prices are expected to have upward momentum in the short term.

Ternary cathode precursor:

This week, prices for 5-series, 6-series, and 8-series products in the ternary cathode precursor market all dropped slightly. From the perspective of raw material costs, nickel sulphate prices increased slightly, while cobalt sulphate and manganese sulphate prices fell due to weak downstream demand. On the demand side, the overall performance of the large-power precursor market was relatively mediocre, with some manufacturers experiencing order transfers, but no significant growth in overall demand. Recently, orders for small-power and consumer-grade precursors have increased, but due to the relatively small size of the consumer market, their boosting effect on overall market demand has been limited. Additionally, some downstream ternary cathode material producers currently have sufficient finished product inventories of precursors and are in a destocking phase, with no urgent stockpiling needs, resulting in relatively mediocre market sentiment. In terms of pricing, due to weak end-use demand, it has been difficult to raise the discount coefficients for ternary cathode precursors. Looking ahead to next week, as month-end approaches, cathode material producers will enter a traditional stockpiling cycle, and market sentiment is expected to turn positive.

Ternary cathode material:

This week, ternary cathode material prices continued to decline. In terms of raw material costs, nickel sulphate and manganese sulphate prices remained relatively stable, cobalt sulphate prices decreased slightly, while lithium chemical prices continued to show a significant downward trend. On the demand side, the large-power NEV market has seen some recovery, with sales of certain car models performing well, and some models being stockpiled in advance ahead of their upcoming launches, providing some support for ternary cathode material demand, but the overall volume remains relatively limited. The consumer and small-power markets have recently seen more orders, particularly strong overseas demand, but due to the relatively small size of the consumer market, the overall increase has not been significant. On the supply side, current market supply mainly relies on previously signed long-term contracts, with some enterprises having raised relevant discount coefficients and adopting a settlement method of negotiating discounts separately for raw materials such as nickel sulphate, cobalt sulphate, and lithium carbonate. Market sentiment has been weak recently, with purchases mainly driven by immediate needs, but with the upcoming peak in month-end stockpiling next week, market activity is expected to increase. In terms of price trends, nickel sulphate prices are expected to remain firm, but lithium chemicals still have downside room. Ternary cathode material prices may continue to decline due to fluctuations in raw material prices.

LFP:

This week, the decline in LFP prices slowed, with an overall decrease of approximately 365 yuan/mt, mainly due to the continuous drop in lithium carbonate prices, which fell by approximately 1,450 yuan/mt in total this week. On the market side, material producers have been relatively active in production this week, with output from top-tier material producers beginning to recover, but production at some second-tier material producers has declined, mainly due to adjustments in the downstream battery cell supply chain structure and a slight decrease in downstream power orders. On the demand side, ESS demand continues to improve. On one hand, the US has reduced tariffs on China, prompting downstream battery cell manufacturers to rush exports, resulting in a slight increase in orders. In terms of price settlements, the average price of iron phosphate showed a slight upward trend in April, with some LFP producers expecting an increase in processing fees for Q2, but no substantive results were achieved after negotiations and discussions with downstream battery cell manufacturers. However, as of now, iron phosphate raw material prices have started to decline, so a certain price reduction is expected for iron phosphate in May. Additionally, with some battery cell manufacturers restarting tenders in June, the likelihood of price increases before then is low. Combining these two points, SMM expects that processing fees for Q2 will be difficult to raise.

Iron phosphate:

This week, iron phosphate prices decreased slightly due to a slight drop in phosphoric acid prices at the raw material end, while industrial ammonium prices remained stable. The decline in iron phosphate prices was significantly influenced by unfavorable expectations for order demand, resulting in relatively weak price support. Due to limitations in LFP processing costs and poor market expectations, lower-priced products are more likely to capture market share. As a result, the number of orders for high-priced iron phosphate has significantly decreased. As the end of May approaches, iron phosphate will gradually enter the order negotiation period for June while also preparing for orders in H2. It is expected that listed companies will have a sales push in June while stabilizing product prices in preparation for order price negotiations in H2.

LCO:

The LCO market was under pressure this week, with mainstream quotations for 4.2V/4.4V/4.5V products falling to 217,000 yuan/mt, 221,000 yuan/mt, and 232,000 yuan/mt, respectively. Price adjustments were mainly driven by dual pressures from the raw material side: battery-grade lithium carbonate continued its downward trend, and Co3O4 prices slightly loosened due to weak procurement sentiment. On the supply side, top-tier enterprises maintained high production levels through capacity releases. On the demand side, terminal manufacturers preparing for the "618" sales promotions drove a temporary increase in battery cell manufacturers' procurement demand. It is worth noting that uncertainties in cobalt raw material supply due to changes in mining policies in the DRC continue to affect the shipping strategies of LCO cathode producers, with market shipments remaining cautious.

Anode:

This week, artificial graphite prices remained stable. On the cost side, graphitisation tolling service prices decreased, while raw material coke prices continued to decline due to weak downstream demand. Although costs have decreased, due to production lag, there has been no significant impact on artificial graphite prices so far. On the supply and demand side, frequent adjustments to tariff policies have led to a wait-and-see attitude among participants in the upstream and downstream of the industry chain, suppressing market transaction activity. Looking ahead, costs are expected to decline slightly further. On the supply and demand side, during the 90-day waiting period after tariff policy adjustments, downstream enterprises may gradually release procurement demand to avoid potential cost increases. However, supply will remain relatively sufficient. Therefore, it is expected that anode material prices may continue to decline.
This week, there were no significant changes in the cost side or the supply-demand dynamics of natural graphite, so the price of natural graphite anode material remained stable. Looking ahead, the technical gap between artificial graphite and natural graphite anode materials in terms of product performance and specifications continues to narrow. With its significant price advantage, artificial graphite has become the preferred procurement choice for downstream enterprises. Therefore, even if tariff benefits boost demand, the actual incremental demand for natural graphite anode material will remain limited. Additionally, the long-standing issue of overcapacity in the industry has yet to be fundamentally resolved, and the market supply side will remain abundant. Under the combined influence of multiple factors, it is expected that the price of natural graphite anode material will continue to face downward pressure in the future.

Separator :

This week, the price of wet-process separators remained relatively stable. The mainstream quotations for 5μm/7μm/9μm products were adjusted to 1.35 yuan, 0.76 yuan, and 0.74 yuan, respectively, with varying degrees of decline this week, mainly due to the expanded reference range of trading volumes. The price of dry-process separators saw a slight increase, with the mainstream quotations for 12μm/16μm products reaching 0.45 yuan and 0.44 yuan. From the perspective of supply-demand structure, the supply side remains oversupplied due to the long expansion cycle of the separator industry, and the previously accumulated capacity has not been fully absorbed. On the demand side, benefiting from the downstream end-use market, procurement orders from battery cell enterprises showed steady growth.

Electrolyte

This week, the price of electrolyte decreased. On the cost side, the price of the core raw material LiPF6 declined due to reduced costs and no significant growth in demand, while the prices of solvents and additives also saw slight decreases, leading to an overall reduction in the manufacturing cost of electrolyte. On the demand side, although the US tariff on China has been adjusted, this policy change has not yet effectively translated into the electrolyte market demand. Downstream customers, based on cautious expectations of market prospects, continue to maintain conservative production and stockpiling strategies, adhering to the principle of "purchasing as needed," resulting in a persistent lack of momentum in market demand growth and difficulty in significantly boosting the industry chain. On the supply side, major industry players are deepening the "produce based on sales" operational model. Although electrolyte prices have remained low for a long time, some enterprises, in order to control costs and reduce losses, actively avoid orders with excessively low prices and obvious losses. However, due to the prominent issue of overall industry overcapacity, other enterprises are willing to bear short-term losses to sell, attempting to seize market share. Overall, in the short term, the supply-demand relationship in the industry is unlikely to improve substantially, and the lack of strong positive factors suggests that electrolyte prices will continue to fluctuate rangebound for some time.

Sodium-ion Battery

Currently, traditional lithium battery cathode and battery cell manufacturers have launched their own sodium-ion battery products, and sodium-ion battery startups are accelerating industrialisation. The sodium-ion battery industry chain is maturing rapidly, with significant differentiation in technical routes. From product demonstrations, sodium iron pyrophosphate (NFPP) is becoming the mainstream cathode material direction. High-performance new products are continuously being introduced, and the sodium-ion battery industry chain is maturing rapidly, with increasingly significant differentiation in technical routes.

Recycling

This week, the prices of lithium chemicals and cobalt salts continued to decline, while the price of nickel salts saw a slight correction but with limited upward momentum. This week, the coefficients for ternary and LCO black mass also continued to decline. Taking ternary black mass as an example: the current coefficient for ternary pole piece black mass is 74-76.5%, and for ternary battery black mass, it is 71-72.5%. The lithium point for LFP pole piece black mass is 2,500-2,600 yuan per lithium point, and for LFP battery black mass, it is 2,100-2,250 yuan per lithium point. On the supply side, the psychological selling prices of grinding mills and traders have loosened somewhat due to the continuous decline in salt prices, and there have been some price reductions, but the extent of the reductions is still slower than the decline in salt prices. Some grinding mills, as the current profit margin in the grinding sector remains below the surplus line, have chosen to hold back from selling, waiting for a subsequent market recovery. Market trading is sluggish, and procurement volume in May is expected to remain stable or slightly decrease compared to April. On the demand side, most wet-process plants have chosen to operate at half capacity due to the continuous decline in nickel, cobalt, and lithium salt prices, especially LFP wet-process plants, which have significantly reduced the frequency of externally purchased black mass or have opted to maintain or cut production lines. Only basic inventory is being consumed, and as the market remains pessimistic about future lithium salt prices, the procurement of LFP black mass is cautious, resulting in very sluggish market trading. On the cost side, except for leading integrated wet-process plants, the profit margins of most wet-process plants remain below the surplus line, especially LFP wet-process plants, which are significantly affected by the decline in lithium salt prices. The profit margin in the grinding sector is slightly better than in wet-process, but some small and medium-sized grinding mills also continue to experience inverted profit margins.

Downstream and End-Use

This week, the price of DC-side battery cabins fluctuated slightly. 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. As the marketisation of on-grid tariffs for incremental projects under Document No. 136 approaches, detailed rules for energy storage participation in the power market mechanism are being issued in various provinces. Before the rules are finalised, most owners are adopting a wait-and-see attitude. This week, the supply-demand pattern in the energy storage market remained stable, and the price of DC-side battery cabins fluctuated slightly. SMM expects that the price of DC-side battery cabins may continue to experience slight fluctuations in the short term.

On May 16, the winning bid result for the design, procurement, and construction (EPC) + operation and maintenance of the 1,000MW/6,000MWh power-side energy storage project in Chayouzhong Banner, Ulanqab City, was announced. The project is located in Ulanqab City, Inner Mongolia Autonomous Region, with a scale of 1,000MW/6,000MWh. The bid winner's quotation was 6,252,099,970.35 yuan, with a converted winning bid unit price of 1.042 yuan/Wh.

》Order to view SMM new energy product spot historical prices

》Click to view SMM New Energy Industry Chain Database

News:    

[Farasis Energy: The company's solid-state battery progress is at the industry's leading level, and semi-solid-state batteries have been recognized by multiple customers] Farasis Energy (688567.SH) announced that during the investor collective reception event on May 21, the company stated that its solid-state battery progress is at the industry's leading level. In terms of semi-solid-state batteries, the company has received recognition from multiple customers, including GAC, Dongfeng, Sany, FAW Jiefang, a leading US eVTOL customer, a leading domestic flying car customer, Shanghai Shi, and Geely Volocopter, making it one of the earliest companies to achieve industrialisation of semi-solid-state batteries. In terms of all-solid-state batteries, the company is simultaneously advancing the R&D of various material systems, including sulfide and oxide/polymer composite systems. The 60Ah sulfide all-solid-state battery is planned to be delivered in small batches to strategic partners by the end of 2025. Additionally, the company's SPS super pouch battery is compatible with multiple material systems, including ternary, LFP, solid-state batteries, and sodium-ion batteries, and has already received project designations from multiple customers, including GAC, Geely, and JMC.
[New Standard for All-Solid-State Batteries Introduced to Address Issues Such as Vague Industry Definitions and Lack of Testing Methods] The Society of Automotive Engineers of China (SAE-China) has officially released the group standard "Determination Method for All-Solid-State Batteries", which clarifies the definition of all-solid-state batteries for the first time, resolves issues such as vague industry definitions and lack of testing methods, and lays the foundation for technological upgrades and industrialisation applications. The new standard stipulates that for a battery to be classified as an "all-solid-state battery", ion transfer must occur exclusively through a solid electrolyte, establishing a strict technical demarcation from hybrid solid-liquid electrolyte batteries. (Cailian Press)
[Xiao Zhengsan, President of China Automobile Dealers Association: Will Continue to Propose Policy Recommendations to Relevant Ministries on Tax Optimization and Other Hot Topics] Xiao Zhengsan, President of the China Automobile Dealers Association, stated that the association will continue to propose policy recommendations to relevant ministries on hot topics, bottlenecks, and development issues such as accelerating the construction of a unified national market, promoting the shift from purchase management to usage management of automobiles, tax optimization, and automobile exports. The association aims to transform the development dilemmas faced by automobile dealers into momentum for high-quality development through counter-cyclical adjustments and institutional guarantees. (Cailian Press)

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

Chen Bolin 021-51666836

Xu Mengqi 021-20707868