[SMM Cobalt and Lithium Morning Meeting Summary] Ternary Prices Continue to Fall, Raw Material Costs Decline Across Multiple Categories

Lithium Ore:

At the beginning of this week, lithium ore prices dropped slightly MoM. On the supply side, overseas mines continued to hold firm on prices, with SC6 quoted at CIF $630/mt and above. There was a strong wait-and-see sentiment, and the willingness to sell was relatively moderate. For traders holding inventory, due to the need for capital repatriation at mid-year, their willingness to sell increased somewhat. On the demand side, downstream buyers, driven by pessimistic expectations for future lithium chemical prices, adopted a cautious stockpiling approach, showing weak purchase willingness for relatively high-priced lithium ore. Coupled with a slight downward trend in lithium carbonate prices at the beginning of the week, this upward transmission led to a synchronous downward trend in lithium ore prices. It is expected that in the short term, lithium ore prices will fluctuate in the same direction as lithium carbonate prices.

Lithium Carbonate:

At the beginning of this week, the center of spot transaction prices for lithium carbonate shifted slightly downward. From the current supply-demand pattern in the lithium carbonate market: On the supply side, the market's tradable volume remained at a relatively sufficient level. On the demand side, downstream material enterprises maintained a cautious procurement strategy, only meeting rigid restocking needs, and there had been no large-scale stockpiling behavior. Currently, there were still divergences in price expectations between upstream lithium chemical enterprises and downstream buyers. Upstream lithium chemical enterprises maintained a certain reluctance to budge on prices, while downstream buyers remained cautious. Considering that end-use demand had not shown significant improvement and inventory levels remained high, it is expected that in the short term, lithium carbonate prices will continue to fluctuate at lows.

Lithium Hydroxide:

At the beginning of this week, lithium hydroxide prices continued to decline. In terms of market sentiment, this month is the month for negotiating long-term contracts for the new quarter. Upstream producers maintained a certain reluctance to budge on prices, while downstream ternary cathode material producers showed a strong willingness to push for discounts on long-term contracts. The final direction of discounts remains to be further observed. Recently, with the relatively low prices of lithium carbonate and lithium ore, lithium hydroxide prices have continued to decline.

Refined Cobalt:

This week, the spot price of refined cobalt maintained a fluctuating trend. On the supply side, due to the slightly lower economic viability of refined cobalt production, the operating rate of smelters remained low, and the supply of refined cobalt decreased slightly. On the demand side, influenced by the policy rumors from the DRC, some smelters and traders reported an increased willingness of downstream producers to inquire about prices. However, currently, most buyers and sellers were still in the price negotiation stage, and overall market transactions remained sluggish. It is expected that before the official implementation of the policy, the spot price of refined cobalt may continue to fluctuate.

Cobalt Intermediate Products:

This week, the spot price of cobalt intermediate products changed relatively little. On the supply side, mainstream mines continued to maintain the supply rhythm of long-term contracts, and spot sales had not yet been opened up. Traders' offers remained stable. On the demand side, when rumors about a possible delay in the DRC policy emerged last week, some traders reported a significant increase in inquiry sentiment, and a small number of transactions were realized. However, overall, with the uncertain future direction of the policy, buyers and sellers remained cautious, and overall spot transactions were still relatively sluggish. Before the official implementation of the policy, it is expected that the spot price of cobalt intermediate products may remain stable.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

This week, the spot price of cobalt sulphate dropped slightly. On the supply side, the offers of mainstream cobalt sulphate smelters remained largely unchanged, while some recycling plants' offers were still relatively low. On the demand side, orders for ternary cathode precursors did not show significant recovery. Refined cobalt production was cut due to poor economic viability, and Co3O4 enterprises were still consuming inventory due to excessive stockpiling in the early stage. Starting from mid-week last week, although influenced by the rumors from the DRC, downstream producers' willingness to inquire about prices increased somewhat, buyers remained cautious, with inquiries mainly aimed at probing sellers' bottom prices. Actual spot transactions between buyers and sellers did not improve significantly. It is expected that before the official implementation of the policy, the spot price of cobalt sulphate will continue to fluctuate weakly.

This week, the spot price of cobalt chloride dropped slightly. There was a significant structural differentiation in the supply landscape: Leading smelters maintained stable offers, with a firm stance on holding prices and a strong willingness to sell. A small number of producers had low-price transactions, exerting certain pressure on spot prices. On the demand side, downstream enterprises had relatively sufficient inventory levels, and market inquiry enthusiasm was insufficient, with an overall wait-and-see attitude. The widely held bullish expectations in the market remained highly consistent and stable. Recently, there have been many market rumors with unclear sources, which may cause certain impacts on the market in the short term. However, it is expected that they will 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. On the supply side, market activity was insufficient after the holiday. Smelters generally lowered their offers, and their willingness to actively sell at lower prices increased, further suppressing spot prices with low-priced goods. On the demand side, LCO enterprises' procurement was mainly for necessary production, lacking the intention to build inventory. They generally adopted a cautious wait-and-see attitude, with a clear sentiment to drive down prices, and market inquiries were sluggish. It is expected that next week, the procurement sentiment of end-users will remain low, and the support from the demand side will be weak. The spot price will continue to be under pressure.

Nickel Sulphate:

On June 16, the SMM battery-grade nickel sulphate index price was 27,577 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,580-28,050 yuan/mt, and the average price remained stable WoW.
In terms of costs, LME nickel prices dropped slightly this week. From the demand side, although there were signs of recovery in nickel salt demand in June MoM, overall demand remained in a sluggish phase. Affected by some raw material inventory and weak order demand, the inquiry and transaction activity of precursor enterprises for nickel salts were low during the traditional procurement period this week. On the supply side, the order signing situation for nickel salt producers in June was poor, and some large nickel salt enterprises planned to carry out shutdown maintenance work in June. Given weak demand coupled with declining costs, some nickel salt producers' offers have shown signs of loosening.
Looking ahead, considering persistently sluggish downstream demand and weakened bargaining power among some buyers, nickel salt prices are expected to weaken further in the short term.

Ternary cathode precursor:

On Monday, prices for 5-series, 6-series, and 8-series ternary cathode precursors continued to decline.Cost side, cobalt sulphate prices kept falling, manganese sulphate dropped slightly, while nickel sulphate remained stable. NEV market side, domestic 6-series ternary precursor orders grew notably due to two factors: first, relatively strong demand for mid-to-high nickel products downstream; second, the dual advantages of 6-series products in cost and performance, which have attracted attention from overseas battery cell manufacturers, with some currently undergoing product validation. In contrast, market shares of 5-series and 8-series products are gradually shrinking. Consumer market side, demand for small power applications like two-wheelers in Southeast Asia and India performed well, with orders expected to maintain steady growth. Overall, trading sentiment in the precursor market remains sluggish, with producers closely monitoring raw material price movements like cobalt sulphate. Short-term, ternary precursor prices are projected to continue a slight downward trend.

Ternary cathode material:

On Monday, ternary material prices extended their decline.Raw material cost side, cobalt sulphate and manganese sulphate prices dipped slightly, nickel sulphate held steady, while lithium carbonate and lithium hydroxide maintained downward trends. NEV market side, June marked the traditional off-season for NEV sales, with mediocre performance. However, some leading battery cell manufacturers showed noticeably increased procurement demand for mid-to-high nickel ternary materials, primarily to stockpile for upcoming new car models and for product validation at overseas cell plants. Consumer market side, the electronics industry entered inventory destocking phase, with orders and production schedules pulling back, though end-use demand remained generally stable. Small power market side, demand in Southeast Asia and India performed well, with active recent orders. Overall, market trading sentiment stayed weak, with producers closely tracking DRC trade policies' impact on raw material prices. Short-term, ternary material prices are expected to remain on a downward trajectory.

LFP:

This week, LFP prices stopped falling and rebounded, rising by about 170 yuan/mt, mainly driven by lithium carbonate prices hitting an upward inflection point with a cumulative increase of around 450 yuan/mt.Currently, the monthly average price for second-generation LFP stands at about 29,000 yuan/mt, third-generation at 30,500 yuan/mt, and fourth-generation at 33,000 yuan/mt. Market side, material producers maintained stable output overall, though production varied due to divergent downstream demand: auto sales fell short of expectations, leading to slight order declines and corresponding production cuts among suppliers. Conversely, the ESS sector performed well, with growth not solely from the US export rush but also strong domestic ESS demand and full order books. Even without the US tariff-driven exports, domestic ESS demand remains optimistic, keeping related suppliers running at high capacity or increasing output.

Iron phosphate:

This week, iron phosphate prices trended downward, with some high-priced products adjusting quotes to regain market favor.Meanwhile, raw material prices stayed stable without cost pressure. Shipment pace was mainly influenced by downstream LFP production. Currently, the iron phosphate market remains steady with limited volatility. As mid-year tendering and order negotiations peak in June, suppliers generally aim to shorten payment terms in H2 to optimize commercial terms, reduce financial costs, and ensure healthy cash flow under recent policy support.

LCO:

The LCO market stabilized this week, with mainstream quotes for 4.2V/4.4V/4.5V products pulling back to 209,000 yuan/mt, 213,000 yuan/mt, and 224,000 yuan/mt respectively.Prices were affected by battery-grade lithium carbonate's slight rebound and Co3O4's continued decline, though the overall impact was limited. Supply side, Co3O4 producers held ample inventory with stronger selling willingness and active price cuts. Demand side, terminal manufacturers are digesting cell inventory, reducing cathode material procurement, keeping LCO plants cautious in raw material purchases. Short-term, LCO prices are expected to remain stable.

Anode:

This week, artificial graphite anode material prices fell at varying rates.Supply-demand pattern side, NEV market demand retreated post-auto shows, while ESS sector activity cooled significantly after mandatory energy storage allocation policy cancellation, worsening supply surplus. Cost side, prolonged coke price declines drove down production costs, jointly pushing anode prices lower. Looking ahead, cost side may stay weak amid ample supply and soft demand; supply-demand side, though some producers may cut output to ease pressure, overcapacity persists, likely prompting price concessions to secure market share.

Natural graphite anode prices dipped slightly recently due to earlier raw material price drops and weak downstream demand. Medium-to-long-term, artificial graphite's accelerated technological narrowing of performance gaps in capacity per gram and cycle life is diverting traditional natural graphite demand in mid-to-high-end lithium batteries. With acute supply-demand imbalance, natural graphite prices face short-term downward pressure from oversupply and medium-term pressure from substitution, sustaining downward momentum.

Separator:

Separator prices remained generally stable this week.Details: wet-process separator mainstream quotes were 1.35 yuan/m² for 5μm, 0.76 yuan/m² for 7μm, and 0.74 yuan/m² for 9μm; dry-process quotes were 0.45 yuan/m² for 12μm and 0.44 yuan/m² for 16μm. Supply side, constrained by long capacity release cycles, accumulated surplus persists. Demand side showed divergence: power battery demand underperformed while ESS demand slightly exceeded expectations, jointly driving slight MoM growth. Given balanced supply-demand, separator prices are expected to stay stable with limited fluctuations.

Electrolyte

Electrolyte prices held steady this week.Cost side, core raw material LiPF6 prices changed marginally, with solvents and additives stable, keeping production costs relatively unchanged. Demand side, sluggish auto sales slowed power battery cell production schedules, while US tariff cuts boosted ESS momentum. Cell manufacturers adopted cautious production plans and "purchasing as needed," limiting electrolyte demand growth. Supply side, producers deepened "produce based on sales" models, avoiding low-margin orders amid chronic overcapacity, though some still sustain sales at short-term losses. Overall, electrolyte prices are expected to fluctuate rangebound.

Sodium-ion battery:

The sodium-ion battery market stayed active this week with parallel progress in technological innovation and industrial applications.Multiple firms launched new products with significantly improved energy density and cycle life, injecting fresh momentum. Applications in ESS and EVs expanded steadily, driving demand growth. However, raw material price volatility and production challenges persist, requiring continued cost optimization and quality control. Overall, the sector trends positively, poised to become a key force in new energy as technology advances and market scales up.

Recycling:

Regeneration: Cobalt sulphate prices kept falling this week, nickel salts stabilized, while lithium chemicals rebounded slightly.Ternary and LCO black mass coefficients continued declining, with LFP prices per % lithium holding steady. Taking ternary black mass as an example: with lithium carbonate prices persistently low, lithium's contribution to revenue lags behind nickel and cobalt, prompting most ternary wet-process producers to price nickel-cobalt and lithium coefficients separately. For ternary pole piece black mass, current nickel-cobalt coefficients range 74-76%, lithium coefficients 71-74%. Demand side, most wet-process plants operated at half capacity amid falling nickel-cobalt-lithium prices, consuming only basic inventory with reduced external purchases and low quotes, resulting in sluggish trading. Supply side, grinding mills and traders adjusted selling prices downward following salt price declines, though at a slower pace. Some mills chose to hold back from selling due to sub-breakeven profits, awaiting market recovery. Cost side, except for leading integrated wet-process plants, most operate below breakeven, especially LFP wet-process plants hit harder by lithium price drops. Ternary wet-process margins slightly outperform LFP, while grinding margins are better than wet-process, though some small-medium mills still face sustained losses.

Downstream and terminal:

DC-side battery cabin prices remained stable this week.The average price for 5MWh DC-side battery cabins was 0.432 yuan/Wh; for 3.44/3.77MWh cabins, 0.437 yuan/Wh. The first month of full marketization for new energy project on-grid tariffs under Document No. 136 saw owners and integrators adopt a wait-and-see approach, keeping the ESS market stable with minimal DC-side cabin price fluctuations. SMM expects DC-side battery cabin prices to stay stable short-term.
On June 11, the list of bid winner candidates for the EPC general contracting and supervision of the 300MW/600MWh ESS power station project of China Science Cloud Storage was 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 RMB 7,920,806,532.1 yuan, which translates to a winning bid unit price of RMB 1.320/Wh. The second bid winner offered a quote of RMB 8,041,840,290 yuan, translating to a winning bid unit price of RMB 1.340/Wh. The third bid winner offered a quote of RMB 8,001,224,935 yuan, translating to a winning bid unit price of RMB 1.334/Wh.

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SMM New Energy Research Team

Cong Wang 021-51666838

Rui Ma 021-51595780

Ziya Lin 86-2151666902

Disheng Feng 021-51666714

Yanlin Lv 021-20707875

Zhicheng Zhou 021-51666711

Zihan Wang 021-51666914

Jie Wang 021-51595902

He Zhang 021-20707850

Haohan Zhang 021-51666752

Bolin Chen 021-51666836

Mengqi Xu 021-20707868