[SMM Cobalt & Lithium Morning Meeting Summary] Electrolyte prices remained stable this week, likely to fluctuate rangebound amid the tug-of-war between sellers and buyers

Lithium Ore:

At the beginning of this week, the price decline rate of lithium carbonate was relatively significant, but the ore-side quotations remained basically flat on a WoW basis. Downstream lithium chemical plants and purchasing traders showed weak purchase willingness for lithium ore priced at $620/mt and above, due to their pessimistic expectations for future lithium chemical prices. The overall transaction prices of lithium ore still fell within the range of $600-620/mt. It is expected that lithium ore prices will fluctuate in sync with lithium carbonate prices in the later period.

Lithium Carbonate:

At the beginning of this week, the price center of spot lithium carbonate transactions continued to move downward. The current lithium carbonate market still maintains a fundamental pattern of oversupply. In terms of supply, there is an abundant supply of goods circulating in the market. In terms of demand, downstream material enterprises have low purchase willingness and are mainly restocking based on rigid demand. Due to the unclear expectations for production schedules in July, there are currently no signs of concentrated stockpiling. From a price performance perspective, the market shows a differentiated trend: leading lithium chemical enterprises, with a relatively high proportion of long-term contracts and limited spot supply, maintain relatively firm quotations. However, some small and medium-sized lithium chemical plants, influenced by inventory and financial pressures, have seen some relaxation in their quotations. Nevertheless, downstream buyers generally adopt a wait-and-see attitude, resulting in sluggish overall market transactions. In summary, against the backdrop of no significant recovery in end-use demand and high inventory levels in the industry chain, it is expected that lithium carbonate prices will continue to fluctuate at lows in the short term.

Lithium Hydroxide:

At the beginning of this week, lithium hydroxide prices continued to decline on a WoW basis. The main reasons are the weakening of cost support due to the low position of lithium ore and the downward pull of lower lithium carbonate prices. Regarding market sentiment, it is currently the time point for quarterly orders and new monthly order negotiations, and downstream buyers have a strong intention to press for discounts. On the lithium chemical side, due to pessimistic expectations for future lithium chemicals, there is a certain reluctance to budge on prices regarding long-term contract discounts, and the discounts for the new cycle are mostly in an undetermined state.

Refined Cobalt:

On Monday this week, influenced by the three-month extension of the export ban in the DRC, both the futures and spot prices of refined cobalt on the Zhonglianjin platform saw significant increases. On the supply side, refined cobalt smelters still maintain long-term contract supplies, with few spot quotations. Traders are mainly adopting a wait-and-see attitude, and a small number of quoting enterprises maintain firm prices. On the demand side, influenced by policies, inquiries from traders and downstream terminals increased today. However, downstream buyers are still cautious when purchasing, resulting in few actual market transactions. Overall, today is the first trading day after the ban was announced, and most enterprises are still in a wait-and-see state, awaiting clarification of market trends.

Intermediate Products:

Today is the first trading day after the DRC ban, and cobalt intermediate product enterprises have suspended quotations. In terms of supply, mines and traders maintained a wait-and-see attitude and refrained from releasing inventory. On the demand side, downstream smelters had relatively sufficient inventory and continued to deplete it. They temporarily suspended purchases until the market trend became clearer. Overall, although enterprises had suspended inquiries and quotations, the market sentiment remained bullish, with most enterprises expecting a significant increase in intermediate product prices.

Cobalt salts (cobalt sulphate and cobalt chloride):

On Monday this week, cobalt sulphate prices stopped falling and rebounded due to the impact of DRC policies.In terms of supply, most smelters suspended quotations and adopted a wait-and-see approach to the market. A few enterprises that provided quotations refused to budge on prices, keeping them around 49,000-50,000 yuan/mt. On the demand side, orders from downstream ternary enterprises had not shown significant improvement. They temporarily adopted a wait-and-see approach to the market, focusing on depleting their previous inventory. Due to poor economic viability, purchases of refined cobalt remained suspended. Overall, the market sentiment for cobalt sulphate had improved significantly. Specific price trends would need to be assessed based on actual transaction prices and downstream demand in the future.

Currently, cobalt chloride enterprises had not provided quotations, and the market was in a wait-and-see mode with no transactions. On June 21st, the DRC issued new policies, extending the cobalt export ban by three months. Affected by these policies, in terms of supply, smelters chose to suspend quotations and shipments, primarily to observe market sentiment. On the demand side, downstream enterprises had relatively sufficient inventory levels. The market was actively inquiring about prices and observing price trends. In terms of prices, although upstream smelters had suspended quotations, their initial price expectations were generally around 60,000 yuan/mt. They were generally bullish in the long term, with optimistic expectations that prices could exceed 70,000 yuan/mt. However, current market sentiment was heavy. Specific price trends would need to be assessed based on actual transaction prices and inventory levels of both upstream and downstream enterprises.

Cobalt salts (Co3O4):

Currently, Co3O4 enterprises had suspended quotations and shipments, with both upstream and downstream adopting a wait-and-see attitude and no transactions occurring.Affected by DRC policies, in terms of supply, Co3O4 plants chose to suspend quotations and observe overall market sentiment and demand. On the demand side, LCO cathode plants had relatively less inventory. However, influenced by overall market sentiment today, they chose to adopt a wait-and-see approach. Nevertheless, purchases were expected to occur soon. In terms of prices, there were no quotations in the market currently. According to downstream sources, upstream enterprises might choose to release inventory at 210,000 yuan/mt. However, specific price trends and the extent of changes would need to be assessed when actual transactions occur. In the long term, Co3O4 prices would still be influenced by cobalt inventory levels. Whether current industry inventory levels could sustain until December had become a key factor affecting price trends.

Battery-grade nickel sulphate:

On June 23rd, the SMM battery-grade nickel sulphate index price was 27,195 yuan/mt. The quotation range for battery-grade nickel sulphate was 27,200-27,600 yuan/mt, with the average price remaining stable WoW. On the cost side, affected by the extension of the cobalt export ban in the DRC, the demand for nickel from ternary materials was suppressed, driving LME nickel prices to continue declining. Overall, the production cost of nickel salts decreased. Supply side, the extension of the cobalt ban boosted the reluctance to budge on prices among some nickel salt smelters, with some halting quotations. Demand side, some precursor producers raised their price acceptance for nickel salts, while most remained on the sidelines. Overall, the extension of the cobalt ban had a positive impact on market sentiment for nickel sulphate, but downstream demand remained relatively weak. Looking ahead, it is expected that sentiment will drive nickel salt prices higher, but the extent of the increase will still be limited by weak downstream demand.

Ternary cathode precursor:

On Monday, prices for 5-series, 6-series, and 8-series products in the ternary cathode precursor market bottomed out and rebounded, mainly influenced by the latest cobalt export policy in the DRC announced over the weekend.The policy extended the cobalt export ban by three months, driving cobalt sulphate prices into an upward phase. Currently, market quotations for ternary cathode precursors have not shown significant fluctuations, with the overall market maintaining a wait-and-see attitude, awaiting further developments in upstream raw material transactions. However, it is expected that the discount coefficient for cobalt sulphate used in settlements between ternary cathode precursor enterprises and downstream cathode material producers will increase. Nickel sulphate prices have temporarily stabilized, but due to macro factors such as the situation in the Middle East, there is an expectation of rising prices for its upstream raw materials, and nickel sulphate prices are expected to remain firm. Manganese sulphate prices have remained relatively stable. The overall performance of the ternary cathode precursor market in June was weak, with no significant growth seen in the NEV market demand, and the small power market also entering the off-season. Considering the current situation, it is expected that market performance in July will remain sluggish. In terms of prices, it is expected that ternary cathode precursor prices will rise with the increase in raw material prices.

Ternary cathode material:

On Monday, ternary cathode material prices rebounded.In terms of raw material costs, nickel sulphate and manganese sulphate prices have temporarily stabilized, while lithium carbonate and lithium hydroxide prices continued to decline. Over the weekend, the DRC announced the latest cobalt export policy, extending the export ban by three months. Unlike the market's primary reliance on sentiment-driven speculation when the cobalt export ban was first announced in late February this year, domestic cobalt inventories in Q3 have significantly decreased compared to Q2, and the market may have sufficient expectations for cobalt sulphate price increases. The strong rise in cobalt sulphate prices is expected to offset the suppressive effect of declining lithium chemical prices on ternary cathode material prices, driving an overall rebound in ternary cathode material prices. In addition, the discount coefficient for cobalt sulphate used in transactions between ternary cathode material enterprises and downstream battery cell manufacturers is also expected to increase. However, currently, market quotations for ternary cathode material products have not changed significantly, with downstream cathode material enterprises generally adopting a wait-and-see attitude, awaiting further developments in the upstream market. On the demand side, the overall performance of the ternary cathode material market in June was mediocre. Entering July, no significant increase has been seen in the NEV market, while the small power market has entered a downward phase. The continuous rise in cobalt sulphate prices is expected to benefit the demand for medium-to-high nickel 6-series ternary cathode materials, while orders for 5-series products may continue to shrink.

LFP:

This week, LFP prices dropped slightly, with an overall decrease of about 60 yuan/mt, mainly due to the slight decline in lithium carbonate prices this week, which fell by a cumulative 200 yuan/mt.On the market side, production at material plants remained relatively stable this week, with demand beginning to diverge. After the reduction in US tariffs, the increase in ESS orders was significant, boosting overall industry production enthusiasm. However, orders in the NEV market continued to decline slightly, mainly due to the NEV market's demand and performance falling short of expectations, with downstream battery cell manufacturers' production schedules for the NEV market decreasing week by week. It is expected that LFP material production in June will increase due to the pull from ESS demand, but the increase will be very limited.

Iron phosphate:

This week, the price center of iron phosphate continued to decline, while the raw material market remained stable.Specifically, prices for phosphoric acid and industrial-grade MAP have not shown significant changes. Notably, ferrous sulphate prices have risen recently, and supply has also become slightly tight. With the expansion of production capacity or the resumption of production activities at some downstream enterprises, demand for iron phosphate is expected to increase. The overall iron phosphate market has remained stable, with no significant fluctuations. Currently, as the critical period for mid-year tenders and order negotiations approaches, the payment terms for iron phosphate have also attracted significant attention. It is understood that the payment terms for most iron phosphate products range from 30 to 90 days. If enterprises choose to shorten the payment terms, the product prices will correspondingly decrease.

LCO:

Today, LCO enterprises have suspended quotations and shipments.LCO price adjustments are primarily driven by changes in raw material costs: recently, battery-grade lithium carbonate prices have continued to decline, while Co3O4 prices have shown strong upward sentiment due to the DRC's policies. On the supply side, Co3O4 enterprises have chosen to suspend quotations and shipments; on the demand side, terminal battery cell manufacturers still have sufficient inventory, but their price acceptance needs to consider whether raw material costs can be passed on to the terminal. Overall, LCO prices are expected to see significant increases in the short term, with the specific extent depending on Co3O4 transaction conditions.

Anode:

Under the dual impact of weakened cost support and supply-demand imbalance, prices for some artificial graphite anode materials declined this week.On the cost side, upstream raw material prices have been declining for two consecutive months, providing a cost basis for the decline in product prices. On the demand side, affected by high finished vehicle inventories, the production pace of NEVs has slowed, leading to downward pressure on power battery cell demand. However, the recovery in demand from the small ESS market has offset the decline in terminal demand for battery cells to some extent. This change in demand structure has been transmitted upstream, keeping demand for anode materials at the battery cell end stable. Meanwhile, the supply side remains abundant. Therefore, prices for artificial graphite anode materials continued to decline this week. Looking ahead, although overcapacity is unlikely to improve in the short term, supported by the potential for a bottom-out rebound in costs due to geopolitical issues, anode material prices may stabilize.

This week, natural graphite anode material prices remained stable amid no significant fluctuations in the cost and supply sides of natural graphite. Looking ahead, with the technological updates and iterations of artificial graphite anodes, the gap in core performance indicators with natural graphite anodes is gradually narrowing. Leveraging the cost-effectiveness advantages brought about by technological breakthroughs, artificial graphite anodes have begun to capture market share, with some downstream customer demand shifting significantly, placing natural graphite anode materials under significant competitive pressure. It is expected that natural graphite anode material prices will face long-term downward pressure.

Separator:

Separator market prices remained generally stable this week.Specifically, mainstream quotations for wet-process separators: 5μm at 1.35 yuan/m², 7μm at 0.76 yuan/m², and 9μm at 0.74 yuan/m². Mainstream quotations for dry-process separators: 12μm at 0.45 yuan/m² and 16μm at 0.44 yuan/m². The supply side is constrained by the prolonged capacity release cycle, with previously accumulated inventory not yet fully digested, and the market continuing to exhibit a supply surplus. The demand side shows structural differentiation: demand in the power battery sector fell short of expectations, while demand in the ESS sector exceeded previous market predictions. The offsetting effects of these two factors drove 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 price fluctuations.

Electrolyte

This week, electrolyte prices remained stable.On the cost side, the price of LiPF6, a core raw material for electrolytes, declined slightly, while prices for solvents and additives remained stable, resulting in no significant fluctuations in the overall manufacturing cost of electrolytes in the near term, with the cost side maintaining a relatively stable situation. On the demand side, the power market is dominated by seasonal factors, with June being a traditional off-season for NEV sales, resulting in mediocre auto sales performance and a slight MoM decline in power battery demand. In the ESS market, due to the gradual emergence of positive effects from the reduction in US tariffs on China, ESS demand has increased. Overall, demand has not changed significantly. On the supply side, electrolyte enterprises continue to deepen the "produce based on sales" operational model. Against the backdrop of electrolyte prices remaining low for an extended period, some enterprises will proactively avoid orders with slim profit margins or even losses. However, constrained by the deep-rooted contradiction of overall industry overcapacity, some enterprises still choose to adopt a volume discount strategy. Considering multiple factors, it is expected that electrolyte prices will continue to fluctuate rangebound in the short term.

Sodium-ion battery:

This week, the sodium-ion battery market continued to develop positively, with some enterprises already signing strategic cooperation agreements for ESS projects in H2.There has been a significant increase in orders for the start-stop market, with both layered oxide and polyanionic compounds receiving orders for start-stop applications. Small ESS orders are predominantly for polyanionic compounds. As the production scale of cathodes and electrolytes increases, their prices are expected to decline, gradually reducing sodium-ion battery costs.

Recycling:

This week, lithium chemical prices fluctuated, while cobalt salt and nickel salt product prices continued to decline. The discount coefficients for ternary materials, LCO black mass, and other products also remained on a downward trend this week, with lithium prices for LFP pole piece black mass ranging from 2,200 to 2,300 yuan/mtu and for LFP battery black mass from 2,000 to 2,150 yuan/mtu.Taking ternary black mass as an example: currently, the nickel-cobalt coefficient for ternary pole piece black mass is 72-74%, and the lithium coefficient is 69-72%. For ternary battery black mass, the nickel-cobalt coefficient is 70-72%. On the demand side, the procurement volumes of most LFP and ternary wet-process plants remained stable this month, primarily consuming basic inventory. Given the market's pessimistic outlook on subsequent lithium chemical prices, they are cautious about purchasing black mass, resulting in a sluggish market for transactions. On the supply side, the psychological selling prices of grinding mills and traders have loosened somewhat due to the continuous decline in salt prices. Black mass prices have generally followed the downward trend of salt prices, with market transactions remaining sluggish. On the cost side, except for leading integrated wet-process plants, the profits of most wet-process plants still fall below the surplus line, especially LFP wet-process plants, which are significantly affected by the decline in lithium chemical prices. While the profits of grinding mills are slightly better than those of wet-process plants, the profits of some small and medium-sized grinding mills continue to be negative.

Downstream and Terminal:

This week, the price fluctuations of DC-side battery cabins were minimal.The average price for a 5MWh DC-side battery cabin was 0.432 yuan/Wh, while for 3.44/3.77MWh DC-side battery cabins, it was 0.437 yuan/Wh. Owners and integrators are still observing the development of ESS participation in the power market liberalization mechanism. The overall ESS market remains stable, with minimal price fluctuations for DC-side battery cabins. SMM expects that the prices of DC-side battery cabins will remain stable in the short term.

On June 17th, the winning bid announcement for the EPC project of the 500MW/2,000MWh grid-side ESS project under the 2025 New-Type Energy Storage Special Initiative in Naiman Banner, Tongliao City, was released. The project is located in Tongliao City, Inner Mongolia, with a total capacity of 500MW/2,000MWh. The winning bidder's quotation was 1,258,001,488.8 yuan, translating to a winning bid price of 0.629 yuan/Wh after conversion.

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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