[SMM Cobalt and Lithium Morning Meeting Summary] Raw Material Prices Stabilized, Iron Phosphate Shipments Influenced by Lithium Production

Lithium Ore:

This week, lithium ore prices remained stable WoW.On the supply side, overseas mines continued to refuse to budge on prices, with SC6 offers at $630/mt CIF and above, while market sentiment was dominated by a wait-and-see approach, and willingness to sell was moderate. On the demand side, downstream buyers had moderate lithium ore inventory and weaker purchase willingness for relatively high-priced cargoes due to pessimistic expectations for future lithium chemical prices. Coupled with recent lithium carbonate prices fluctuating around 60,300 yuan/mt, the downward momentum for spodumene prices remained limited, leading to a temporary stabilization of current prices. Overall market transactions were sluggish. In the short term, lithium ore prices are expected to fluctuate in tandem with lithium carbonate prices.

Lithium Carbonate:

This week, spot lithium carbonate prices showed a slight upward trend, with the average battery-grade lithium carbonate price rising from 60,250 yuan/mt to 60,650 yuan/mt, and the average industrial-grade lithium carbonate price increasing from 58,650 yuan/mt to 59,050 yuan/mt, both up by around 400 yuan/mt cumulatively.Despite the upward shift in the price center, actual market transactions remained sluggish. Supply side, weekly lithium carbonate production continued to increase, mainly due to the previous rebound in futures prices boosting production enthusiasm at some lithium chemical plants. Demand side, downstream material plants showed weak procurement enthusiasm, with no further inventory-building intentions, waiting for prices to decline further. The price standoff between upstream and downstream players led to persistently low market activity, with a clear gap in psychological price levels between buyers and sellers. Macro perspective, factors such as Sino-US tariff policy negotiations impacted market sentiment, leading to a temporary rebound in futures prices, but spot market performance lagged, widening the spread between futures and spot prices. Cost side, stable lithium ore prices provided some support for lithium carbonate prices, but end-use demand showed no significant improvement, coupled with current high inventory levels, keeping market sentiment cautious toward the outlook.

Lithium Hydroxide:

This week, lithium hydroxide prices continued to decline.Production-wise, some companies adjusted output levels due to limited downstream sales channels and high inventory. Downstream, production proceeded according to schedules, with no major changes in orders. Market sentiment-wise, this month marks the long-term contract negotiation period for the new quarter, with upstream players maintaining a firm stance on prices, while downstream ternary cathode material plants showed strong willingness to push for higher long-term contract discounts. The final discount direction remains to be observed. Recently, with lithium carbonate and lithium ore prices at relatively low levels, lithium hydroxide prices continued to trend downward.

Refined Cobalt:

This week, spot refined cobalt prices maintained a fluctuating trend. Early in the week, spot prices followed the slight dip in the futures market, but mid-week, market sentiment improved slightly due to speculative reports, leading to a slight rebound. Overall, spot refined cobalt prices remained stable WoW. In terms of supply, due to the relatively low economic efficiency of refined cobalt production, the operating rate of smelters remained low, leading to a slight decline in the supply of refined cobalt. On the demand side, with the uncertainty surrounding the future policy direction in the DRC, downstream producers maintained their just-in-time procurement pace and were still digesting social inventory without significant stockpiling, resulting in a generally weak buying sentiment in the market. It is expected that the spot price of refined cobalt will likely maintain a fluctuating trend before the official policy announcement.

Cobalt Intermediate Products:

This week, the low-end spot prices of cobalt intermediate products experienced a slight decline, while the high-end prices remained stable.In terms of supply, mainstream mines continued to maintain their long-term contract supply pace, with spot order sales still restricted. Traders' offers for cargo sources slightly decreased. On the demand side, due to the uncertainty surrounding the future policy in the DRC and the recent decline in cobalt-related product prices, downstream producers maintained a wait-and-see attitude, with relatively weak buying sentiment. Overall, spot transactions of cobalt intermediate products were sluggish this week, with buyers and sellers remaining cautious. It is expected that the spot price of cobalt intermediate products may remain relatively stable before the official policy announcement.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

This week, the spot price of cobalt sulphate slightly decreased.In terms of supply, the offers from mainstream cobalt sulphate smelters remained largely unchanged, while some recycling plants experienced a certain decline in their offers. On the demand side, orders from ternary cathode precursor enterprises did not show significant recovery. Refined cobalt production was cut due to its weak economic efficiency. Co3O4 enterprises were still depleting their inventory due to excessive stockpiling in the early stage. Coupled with the uncertainty surrounding the future policy in the DRC, downstream producers generally adopted a wait-and-see attitude, remaining cautious overall, with continuously low purchase willingness. Spot transactions of cobalt sulphate were extremely sluggish. It is expected that the spot price of cobalt sulphate will continue to fluctuate weakly before the official policy announcement.

This week, the spot price of cobalt chloride slightly pulled back. There was a significant structural differentiation in the supply landscape: leading smelters maintained stable offers, with a firm stance on refusing to budge on prices; a small number of producers had transactions at lower prices, exerting certain pressure on the spot price. On the demand side, downstream enterprises had relatively sufficient inventory levels, with insufficient market inquiry enthusiasm, maintaining an overall wait-and-see stance. The widely held bullish expectations in the market remained highly consistent and stable. There were many market news items recently, but their sources were unclear, which would cause certain impacts on the market in the short term. However, it is expected that this would not change the overall price trend. The spot price of cobalt chloride will continue to fluctuate at highs, with limited room for pullback.

Cobalt Salts (Co3O4):

This week, the spot price of Co3O4 in the market continued to pull back.In terms of supply, market activity was insufficient after the holiday. Smelters generally lowered their offers, with an increased willingness to sell at a concession, and low-priced cargo sources further suppressed the spot price. Demand side, LCO enterprises' procurement is primarily for essential production needs, lacking the intention to build inventory. They generally maintain a cautious wait-and-see attitude, with a clear sentiment of driving down prices. Market inquiries are sluggish. It is expected that terminal procurement sentiment will remain low next week, with weak support from the demand side. Spot prices will continue to be under pressure.

Nickel sulphate:

As of Thursday this week, the SMM battery-grade nickel sulphate index price was 27,585 yuan/mt, with a quotation range for battery-grade nickel sulphate of 27,580 to 28,050 yuan/mt, and the average price remained stable WoW. From the demand side, this week is not a traditional procurement period, and market enthusiasm is not high. Some precursor plants have shown increased inquiry enthusiasm due to new orders at month-end. However, overall market inquiries and transactions remain relatively sluggish. From the supply side, due to the current weak market demand, some nickel salt smelters have stopped providing quotations. Currently, finished product inventories at nickel salt smelters are relatively sufficient, and some have a high willingness to sell. However, due to the still strong cost support, nickel salt quotations remain relatively flat compared to last week. Looking ahead, considering the continued mediocre downstream demand and the weakened bargaining power of some sellers, it is expected that nickel salt prices may further weaken 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 continued to decline. From the raw material cost perspective, cobalt sulphate prices continued to fall, while nickel sulphate and manganese sulphate prices remained relatively stable. In the NEV market, orders for domestic 6-series ternary cathode precursors have increased significantly, mainly due to two reasons: firstly, the relatively good demand for downstream medium- and high-nickel products; secondly, 6-series products have dual advantages in terms of cost and performance, attracting the attention of overseas battery cell manufacturers. Currently, some overseas customers are conducting verification of 6-series products. In contrast, the market share of 5-series and 8-series products is gradually being compressed. In the consumer market, demand for small power applications such as two-wheelers in Southeast Asia and India has performed well, and orders are expected to maintain stable growth in the coming period. Overall, the transaction atmosphere in the current precursor market remains relatively sluggish, with enterprises generally focusing on changes in raw material prices such as cobalt sulphate. In the short term, ternary cathode precursor prices are expected to continue to show a slight downward trend.

Ternary cathode material:

This week, ternary cathode material prices continued their downward trend. In terms of raw material costs, cobalt sulphate prices continued to fall slightly, while nickel sulphate and manganese sulphate prices remained temporarily stable. Lithium carbonate rebounded to a certain extent due to macro sentiment, while lithium hydroxide prices still showed a clear downward trend. In the NEV market, June is a traditional off-season for the NEV market, with mediocre whole vehicle sales performance. However, some leading battery cell manufacturers have seen a significant increase in procurement demand for medium- and high-nickel ternary cathode materials, mainly due to two reasons: firstly, stockpiling in advance for new car models to be launched soon; secondly, for product verification at overseas battery cell manufacturers. In the consumer market, the consumer electronics industry has entered the inventory de-stocking phase, with orders and production schedules declining, while end-use demand remains generally good. In the small power market, demand in Southeast Asia and India has performed well, with related orders being active recently. Overall, the market transaction atmosphere is relatively weak, and enterprises are generally closely monitoring the impact of DRC's trade policies on the price trend of raw materials. It is expected that in the short term, ternary cathode material prices will continue their downward trend.

LFP:

This week, LFP prices showed a trend of stopping falling and rebounding, with an overall increase of about 170 yuan/mt, mainly due to the upward inflection point in lithium carbonate prices this week, which increased by about 450 yuan/mt cumulatively. Currently, the monthly average price of second-generation LFP is about 29,000 yuan/mt, the monthly average price of third-generation LFP is about 30,500 yuan/mt, and the average price of fourth-generation LFP is about 33,000 yuan/mt. In the market, the overall production of material plants has been relatively stable this week. Due to the differentiation in downstream demand, the production situations of different material plants vary. In summary: due to auto sales falling short of expectations, orders for power applications have generally declined slightly, and corresponding suppliers have also reduced production slightly. However, on the contrary, the overall ESS market has performed well. This time, the increase in ESS demand is not only due to the rush to export in the US but also due to the relatively good domestic ESS market demand itself, with full orders. However, due to the reduction in reciprocal tariffs, battery cell manufacturers prioritized export orders to the US in June. Even without this rush to export in the US, domestic ESS demand would still be relatively optimistic. Therefore, the production situations of related suppliers are relatively optimistic, with overall increases or maintaining full production.

Iron phosphate:

This week, the market price of iron phosphate showed a downward trend, with some high-priced iron phosphate products actively adjusting their quotation strategies to regain market favour. Meanwhile, raw material prices remained stable, with no upward cost pressure. The shipping speed of iron phosphate is mainly affected by the production status of downstream LFP. Currently, the overall performance of the iron phosphate market is stable, lacking significant fluctuations. With the arrival of the critical period for mid-year tenders and order negotiations in June, driven by the recent policy environment, iron phosphate suppliers generally expect to shorten order payment terms in H2, thereby optimizing business conditions, reducing financial costs, and ensuring the stability and health of cash flow.

LCO:

The LCO market was relatively stable this week, with mainstream quotations for 4.2V/4.4V/4.5V products falling to 209,000 yuan/mt, 214,000 yuan/mt, and 225,000 yuan/mt, respectively. Prices are influenced by changes in the prices of raw materials, lithium carbonate and Co3O4: battery-grade lithium carbonate prices have recently rebounded slightly, while Co3O4 prices have still fallen to a certain extent. Overall, this has not had a significant impact on LCO prices. On the supply side, Co3O4 enterprises currently have relatively abundant inventory reserves, and upstream willingness to sell has increased significantly, actively reducing quotations. On the demand side, terminal manufacturers are in the stage of digesting battery cell inventories, with decreased procurement of cathode materials. LCO cathode plants are relatively cautious in raw material procurement. It is expected that LCO prices will remain stable in the short term.

Anode:

This week, prices for artificial graphite anode materials showed declines of varying magnitudes. From the perspective of the supply-demand pattern, the power market has seen a decline in procurement demand after the auto show ended, and the ESS sector has experienced a significant cooling in market transaction activity due to the cancellation of the "mandatory energy storage allocation" policy, further exacerbating the supply surplus situation. On the cost side, the downward trend in raw material coke prices lasting for two months has driven the continuous decline in anode material production costs. The combination of these two factors has pushed anode material prices downward. Looking ahead, the cost side may continue to be weak due to loose supply and weak demand. On the supply-demand side, although some enterprises may alleviate pressure through production cuts, the overcapacity situation is difficult to improve. Therefore, enterprises may sell at a concession to seize market share.

Affected by the dual impact of the previous decline in raw material prices and weak downstream demand, the price of natural graphite anode materials has recently fallen slightly. Looking ahead, with the accelerated iteration of artificial graphite technology, the gap in core performance indicators such as capacity per gram and cycle life with natural graphite continues to narrow. Some customers in the mid-to-high-end lithium battery sector have begun to switch to artificial graphite, leading to a gradual diversion of traditional demand for natural graphite. The industry's supply-demand imbalance is prominent. Therefore, the price of natural graphite anode materials will fall slightly in the short term driven by the supply-demand imbalance and face continuous downward pressure in the medium and long term due to technological substitution.

Separator:

Separator market prices remained generally stable this week. Specifically, the mainstream quotations for wet-process separators are as follows: 5μm at 1.35 yuan/m², 7μm at 0.76 yuan/m², and 9μm at 0.74 yuan/m². The mainstream quotations for dry-process separators are as follows: 12μm at 0.45 yuan/m² and 16μm at 0.44 yuan/m². On the supply side, due to the relatively long industry capacity release cycle, the accumulated inventory capacity has not yet been fully digested, and market supply continues to be in a state of surplus. On the demand side, performance has been differentiated. Demand in the power battery sector is weaker than expected, while demand in the ESS sector slightly exceeds previous market estimates. The combined effect of these two factors has driven a slight MoM increase in overall industry demand. Based on the current supply-demand balance, it is expected that separator prices will remain stable in the short term, with limited room for fluctuations.

Electrolyte

This week, electrolyte prices remained stable. On the cost side, the market prices of core raw materials for electrolytes, such as LiPF6, solvents, and additives, have remained stable, resulting in no significant fluctuations in the overall manufacturing cost of electrolytes in the near term. The cost side still maintains a relatively stable pattern. On the demand side, in the power battery sector, due to the recent mediocre performance of terminal vehicle sales, which has been transmitted to the upstream supply chain, battery cell enterprises have slowed down their production schedules. In the ESS market, the positive effects brought about by the reduction in US tariffs on China have gradually emerged, injecting new momentum into the ESS sector. Affected by multiple factors, battery cell enterprises generally adopt a cautious production scheduling strategy while maintaining a "purchasing as needed" model, resulting in weak growth momentum in market demand and limited overall boosting effect on the electrolyte industry. On the supply side, enterprises are continuously deepening the "produce based on sales" operating model. Against the backdrop of electrolyte prices remaining at a low level for a long time, some enterprises will actively avoid orders with small profit margins or even losses. However, constrained by the deep-rooted contradiction of overall industry overcapacity, some enterprises still choose to maintain sales at the cost of short-term losses. Considering multiple factors, it is expected that electrolyte prices will continue to fluctuate rangebound in the subsequent period.

Sodium-ion battery:

The sodium-ion battery market remained active this week, with technological innovation and industrial applications advancing side by side. Multiple enterprises have launched new sodium-ion battery products, with significant improvements in energy density and cycle life, injecting new momentum into the industry. Meanwhile, the applications of sodium-ion batteries in sectors such as ESS and EVs have gradually expanded, with steady growth in market demand. However, fluctuations in raw material prices and challenges in production processes still exist, requiring enterprises to continuously optimize costs and control quality. Overall, the development trend of the sodium-ion battery industry is positive, and it is expected to become an important force in the new energy sector in the future with technological progress and market expansion.

Recycling:

Regeneration: This week, cobalt sulphate prices continued to fall, nickel salt prices remained stable, and lithium chemical prices rebounded slightly. This week, the coefficients for ternary cathode precursor black mass, LCO black mass, etc., continued to fall, while the lithium points for LFP remained temporarily stable. Taking ternary cathode precursor black mass as an example: at present, due to the long-term low price of lithium carbonate, the income generated by lithium chemicals is lower than that of nickel sulphate and cobalt sulphate. Therefore, most ternary wet-process enterprises price the nickel-cobalt and lithium coefficients of ternary cathode precursor black mass separately. Taking the coefficient of ternary pole piece black mass as an example: at present, the nickel-cobalt coefficient of pole piece black mass is 74-76%, and the lithium coefficient of pole piece black mass is 71-74%. On the demand side, most wet-process plants have maintained a semi-shutdown state amid the continuous decline in nickel-cobalt-lithium salt prices, only consuming basic inventories and reducing the frequency of external purchases. Their external quotations are relatively low, and market transactions are very sluggish. On the supply side, the psychological selling prices of grinding mills and traders have loosened to some extent with the continuous decline in salt prices. Black mass prices have basically followed the continuous price reduction behavior of salt prices, but the price reduction amplitude is still slower than the salt price decline speed. Moreover, some grinding mills have chosen to hold back from selling due to the current profit margins of the grinding process still being below the surplus line, waiting for subsequent market recovery. Market transactions are sluggish. On the cost side, currently, except for leading integrated wet-process plants, the profits of most wet-process plants are still below the surplus line. In particular, LFP wet-process plants have been greatly affected by the decline in lithium chemical prices. Currently, the profitability of the ternary wet-process sector is slightly better than that of the LFP sector, while the profitability of the grinding sector is slightly better than that of the wet-process sector. However, the profitability of the grinding sector in some small and medium-sized plants also continues to be upside down.

Downstream and Terminal:

This week, the prices of DC-side battery cabins remained relatively stable. The average price of 5MWh DC-side battery cabins was 0.432 yuan/Wh; the average price of 3.44/3.77MWh DC-side battery cabins was 0.437 yuan/Wh. In the first month of the full implementation of the market-oriented on-grid tariff for new energy projects under Document No. 136, owners and integrators still adopted a wait-and-see attitude. The overall ESS market remained stable, with small fluctuations in the prices of DC-side battery cabins. SMM expects that the prices of DC-side battery cabins may remain stable in the short term.
On June 11, the shortlisted candidates for the EPC general contracting and supervision of the ESS power station project of the 300MW600MWh project by China Science Cloud Storage were announced. The project is located in Shouguang City, Weifang City, Shandong Province, with a total capacity of 300MW/600MWh. The first bid winner offered a quote of 7,920,806,532.1 yuan, which translates to a winning unit price of 1.320 yuan/Wh after conversion. The second bid winner offered a quote of 8,041,840,290 yuan, translating to a winning unit price of 1.340 yuan/Wh after conversion. The third bid winner offered a quote of 8,001,224,935 yuan, translating to a winning unit price of 1.334 yuan/Wh after conversion.

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News:   

[Ministry of Industry and Information Technology: Supports Automakers' "60-Day Payment Term" Commitment to Promote Healthy Industry Development] Recently, 17 key automotive enterprises, including FAW, Dongfeng, GAC, and Seres, have successively issued statements committing to "payment terms not exceeding 60 days." Today (the 12th), relevant officials from the Ministry of Industry and Information Technology stated that the automakers' commitment is of great significance in promoting the healthy and sustainable development of the automotive industry. Relevant officials from the Ministry of Industry and Information Technology also stated that the automakers' proactive commitment to "payment terms not exceeding 60 days" reflects their active response to national calls, fulfillment of social responsibilities, and corporate commitments, and is of great significance in building a collaborative and win-win development ecosystem between "complete vehicles and parts." Relevant officials from the Ministry of Industry and Information Technology also stated that currently, China's NEV industry is at a critical period of high-quality development. It is hoped that enterprises will lead by example and strengthen industry self-discipline. It is also hoped that all sectors of society will care about and support the high-quality development of the NEV industry, jointly resist online chaos such as "internet water armies" and "black PR," and create a positive, upward, civilized, and orderly development environment. (Caijing)
[CITIC Securities: Responding to Policies, the Automotive Industry Enters a New Stage of High-Quality Development] A research report by CITIC Securities pointed out that on June 10, multiple automakers, including GAC, Dongfeng, Seres, Geely, and BYD, responded to the "Regulations on Ensuring Payments to Small and Medium-Sized Enterprises" issued by the State Council and the initiative of the China Association of Automobile Manufacturers (CAAM), committing to unify supplier payment terms to within 60 days to accelerate capital turnover in the industry chain and ensure supply chain stability. Previously, the procurement payment terms of large automakers generally exceeded 60 days, exacerbating the risks of capacity expansion and price wars. This move not only responds to policies but will also fundamentally promote high-quality development in the automotive industry and drive positive changes in the industry chain.
[Shenyang: Five Activities Including Home Appliance Trade-In Suspended from 24:00 on June 30] The Shenyang Municipal Bureau of Commerce issued an announcement on adjusting some trade-in activities for consumer goods. Starting from 0:00 on June 13, the subsidy qualification application portals on platforms such as Liaoshitong and WeChat will be temporarily closed, and all applications will be unified through the portals of UnionPay and JD.com. Meanwhile, the subsidy qualification application time for three activities, including home appliance trade-in, purchase subsidies for new mobile phones, tablets, and smartwatches (bands), and home renovation and kitchen/bathroom "refresh," will be adjusted to 9:00 to 12:00 daily. Subsidy quotas for each portal will be issued daily on a first-come, first-served basis, and will end once the daily quota is exhausted. Starting from 24:00 on June 30, five activities, including home appliance trade-in, purchase subsidies for new mobile phones, tablets, and smartwatches (bands), home renovation and kitchen/bathroom "refresh," e-bike trade-in, and automobile replacement, will be suspended. The resumption time of these activities will be announced separately.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Lin Ziya 86-2151666902

Feng Disheng 021-51666714

Lü 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