[SMM Cobalt and Lithium Morning Meeting Summary] Sluggish supply and demand in the disassembly recycling market: black mass prices fluctuate with salt prices, and transactions are sluggish

Lithium Ore:

This week, with the temporary recovery of lithium carbonate prices, lithium ore suppliers continued to hold firm on prices at elevated levels. Given some hedging profit opportunities, traders and lithium chemical plants on the buyer side slightly raised their acceptance prices for lithium ore. Some transactions of lithium concentrates were concluded at USD 620-630/mt, driving a slight increase in the lower end of market prices.In terms of market sentiment, except for some non-integrated lithium chemical plants showing enthusiasm for lithium ore procurement, most enterprises adopted a wait-and-see attitude, resulting in relatively sluggish market transactions.

Lithium Carbonate:

This week, the spot market for lithium carbonate exhibited a fluctuating trend of initial decline followed by a rise. The center of transaction prices slightly increased WoW, but the overall market remained constrained by the fundamental pattern of oversupply, with no significant relief in the supply-demand imbalance.At the beginning of the week, the average price of battery-grade lithium carbonate fell below the RMB 60,000/mt threshold. Downstream cathode material enterprises maintained just-in-time procurement, and the market transaction atmosphere was sluggish. In the mid-to-late week, lithium carbonate prices stopped falling and rebounded, with the average price of battery-grade lithium carbonate gradually recovering to around RMB 60,600/mt. However, the price rebound was not accompanied by a substantive improvement in demand. Downstream material enterprises still adopted a cautious procurement strategy, preferring to lock in costs by increasing long-term contract volumes to mitigate price fluctuation risks. On the supply side, market liquidity remained abundant. Leading lithium chemical plants maintained relatively firm quotes supported by long-term contract orders, while some small and medium-sized producers, affected by inventory pressure, had a stronger willingness to sell, resulting in a differentiated market quote situation.

Lithium Hydroxide:

This week, lithium hydroxide prices continued their previous downward trend.In terms of production, most enterprises maintained a relatively stable production rhythm, with individual enterprises reducing production due to high inventory levels and pessimistic expectations for future demand. In terms of market sentiment, during recent order negotiations, lithium chemical plants showed a relatively obvious reluctance to budge on prices and preferred to shorten agreement terms. On the demand side, there was also a clear intention to push for discounts on low-priced downstream orders and spot orders. Coupled with the relatively low cost brought by the relatively low ore prices, there was a significant downward trend in market prices.

Refined Cobalt:

This week, influenced by the policy of extending the export ban in the DRC, both the futures and spot prices of refined cobalt on the CNIE platform saw a substantial increase.On the supply side, most refined cobalt smelters still maintained long-term contract supplies, with fewer spot quotes. After a few trading days of observation, traders gradually resumed quoting and maintained firm prices. On the demand side, at the beginning of the week, influenced by the policy, inquiries from traders and end-users significantly increased, and actual transactions were sporadically heard. However, as the futures prices on the CNIE platform returned to fluctuations in mid-week, market sentiment cooled down. Some traders reported a weakening in end-user inquiries, and actual transactions were limited. Overall, due to the currently high social inventory of refined cobalt in the midstream and no significant improvement in downstream demand, even with the major positive news of the DRC's export ban extension, most downstream producers still maintained a just-in-time procurement rhythm, with actual transactions remaining relatively sluggish. It is expected that refined cobalt prices may return to a fluctuating pattern next week.

Intermediate Products:

This week, cobalt intermediate product prices rose slightly.On the supply side, most mines and traders held a bullish sentiment and suspended quoting, while a few quoting enterprises maintained firm prices. On the demand side, smelters faced difficulties such as production cost losses and sluggish downstream demand. Under uncertain future conditions, they still temporarily suspended procurement and focused on consuming their own inventory. Some smelters with relatively low inventory attempted to inquire about prices in the market, but due to significant price differences between buyers and sellers, actual transactions were still difficult to achieve. Overall, influenced by the DRC's export ban extension policy, China's cobalt intermediate products will still face a shortage of raw materials in the future, and there is upward momentum in prices. However, during this process, attention needs to be paid to the inhibition of downstream demand caused by the increase in raw material prices.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

This week, influenced by the DRC's policy, cobalt sulphate prices stopped falling and rebounded.On the supply side, smelters and traders maintained quotes near the previous highs. On the demand side, downstream ternary enterprises' orders still showed no significant improvement, and they temporarily adopted a wait-and-see attitude, focusing on digesting previous inventory. Refined cobalt procurement was still suspended due to poor economic viability. Overall, after the policy was introduced, the current market sentiment for cobalt sulphate has significantly improved compared to last week. However, due to the rapid price increases by upstream suppliers and uncertain future conditions, downstream purchase willingness is weak, and actual market transactions are limited. It is expected that cobalt sulphate prices will temporarily stabilize next week, waiting for feedback from actual market transactions.
Currently, a few cobalt chloride producers are offering quotes at 63,000-65,000 yuan/mt, while some salt smelters have chosen to suspend quoting and continue to monitor the market. On the supply side, smelters still exhibit a strong wait-and-see sentiment, resulting in fewer market transactions. On the demand side, downstream enterprises have relatively ample inventory levels, and the market is actively inquiring, but buyers and sellers remain cautious. Regarding prices, although upstream smelters have begun to offer quotes, these quotes only reflect upstream expectations of the current market price. The specific price trend will depend on the actual transaction prices and inventory levels of upstream and downstream enterprises in the future.

Cobalt salts (Co3O4):

Currently, Co3O4 producers are still suspending quotes and shipments, with both upstream and downstream maintaining a wait-and-see attitude and no transactions occurring. Affected by DRC policies, on the supply side, Co3O4 producers have chosen to suspend quoting and monitor the overall market sentiment and demand. On the demand side, LCO cathode plants have relatively low inventory levels, but the market has been significantly influenced by sentiment recently, leading them to adopt a wait-and-see approach. Regarding prices, there are currently no quotes in the market, but some Co3O4 producers have indicated that their shipment expectations may range from 210,000-220,000 yuan/mt. The specific price trend and range of changes will need to be judged when actual transactions occur. In the long term, Co3O4 prices will still be influenced by cobalt inventory levels. Whether the current industry inventory can support the market until December has become a key factor affecting the price trend.

Nickel sulphate:

On June 26, the SMM battery-grade nickel sulphate index price was 27,199 yuan/mt, with the quotation range for battery-grade nickel sulphate being 27,200-27,600 yuan/mt, and the average price remaining stable compared to the previous day.
In terms of costs, affected by the general rise in non-ferrous metals and the rebound from oversold conditions, LME nickel prices have rebounded. Overall, the immediate production costs of nickel salts have increased. From the supply side, some nickel salt smelters have halted production for maintenance due to losses, while others have maintained stable quotes. From the demand side, precursor plants have reduced their inquiry enthusiasm due to weak demand. This week, market transactions and inquiry activity have remained at a low level.
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:

This week, the prices of 5-series, 6-series, and 8-series ternary cathode precursor products have all increased slightly. In terms of raw material costs, the prices of nickel sulphate and manganese sulphate have remained stable, while cobalt sulphate has rebounded due to the extension of the DRC's export ban, but the upward momentum has gradually slowed. Currently, the market quotes for ternary cathode precursors have changed little, and cathode material producers have low willingness to accept increases in the discount coefficients for precursors, mainly due to the still weak overall market demand for ternary materials, limiting the space for price increases. On the demand side, the overall performance of the domestic ternary power market remains sluggish, with only some suppliers of leading battery cell manufacturers experiencing order growth. The consumer market performed generally in June, and it is expected that orders from some producers will recover slightly in July. On the supply side, the overall shipment performance of ternary cathode precursors in June was weak, with some producers experiencing significant production reductions, but a slight recovery is expected in July. Driven by the increase in cobalt sulphate prices, ternary cathode precursor prices may rise slightly in the short term.

Ternary cathode material:

This week, the prices of 5-series ternary cathode materials have increased slightly, while the prices of 6-series and 8-series materials have remained relatively stable. In terms of raw material costs, the prices of nickel sulphate and manganese sulphate have remained stable, while cobalt sulphate has rebounded due to the extension of the DRC's cobalt export ban, but the upward momentum has slowed. Lithium carbonate has exhibited a fluctuating trend, while lithium hydroxide has continued a significant downward trend. On the demand side, the overall performance of the domestic ternary power market has been mediocre, with only some newly launched car models driving order growth for medium- and high-nickel ternary cathode materials. In the small power sector, end-use products such as two-wheelers and power tools have shown relatively good demand in Southeast Asia and India, providing some support for orders of consumer-grade ternary cathode materials. On the supply side, the actual production of ternary cathode materials in June and the production schedule for July have been relatively flat, with no significant increases expected. The market remains cautious about the third and fourth quarters of H2. Regarding prices, the increase in cobalt sulphate prices and the decrease in lithium chemical prices have offset each other. Against the backdrop of still weak overall demand, ternary cathode material prices are expected to fluctuate slightly in the short term, lacking significant upward drivers.

LFP:

This week, LFP prices have dropped slightly, with an overall decrease of about 25 yuan/mt. Lithium carbonate prices have rebounded after falling this week, exhibiting an overall slight downward trend, with a cumulative decrease of about 100 yuan/mt. In the market, material plants have maintained relatively stable production this week. After the impact of the US tariff reduction, the increase in ESS orders has been significant, driving overall production enthusiasm in the industry. However, orders in the power market have continued to decline slightly, mainly due to the power market's demand and performance falling short of expectations, and the expected production schedule for power battery cells by downstream battery cell manufacturers has decreased week by week. It is expected that LFP material production in June will increase slightly due to the pull from ESS demand, but the increase will be very limited.

Iron phosphate:

This week, iron phosphate prices have continued to weaken, while in the raw material market, industrial-grade MAP and phosphoric acid prices have remained stable, and ferrous sulphate prices have increased with tightening supply. After some high-priced iron phosphate producers lowered their prices, order situations have barely been maintained. In June, some iron phosphate producers have received considerable orders with high operating rates, but this is mostly concentrated among producers with resource advantages and competitive product prices. With the expansion of production capacity or production recovery of some downstream enterprises, iron phosphate demand is expected to grow. The market is generally stable, with payment terms being a key concern during mid-year tenders and order negotiations.

LCO:

Recently, LCO producers have still not offered quotes. LCO price adjustments are mainly driven by changes in raw material costs: recently, battery-grade lithium carbonate prices have continued to fall, while Co3O4 prices have shown strong upward sentiment due to DRC policies. On the supply side, Co3O4 producers have chosen to suspend quoting and shipments, and LCO cathode plants still need to wait for upstream prices to become clear before determining subsequent prices and shipment situations. On the demand side, terminal battery cell manufacturers still have sufficient inventory, but their acceptance of prices needs to consider whether raw material costs can be passed on to the terminal. Overall, LCO prices are expected to rise significantly in the short term, with the specific extent depending on Co3O4 transaction situations.

Anode:

This week, the prices of some artificial graphite anode materials have declined due to the impact of previous cost reductions. On the demand side, constrained by high finished vehicle inventory levels, automakers have slowed down their production pace, leading to weak growth in power battery cell demand. However, the recovery in the small ESS market has effectively offset some of the demand gaps caused by the decline in NEV demand. This change in demand structure has been transmitted layer by layer, maintaining relatively stable demand for anode materials at the battery cell level. Meanwhile, the supply side remains abundant. On the cost side, due to the lag in the production process, the price transmission effect of previous cost reductions has gradually been released in the current production cycle, driving corresponding adjustments in product prices. Under the dual impact of continued abundant supply on the supply side and downward pressure on the cost side, the prices of artificial graphite anode materials have continued to decline this week. Looking ahead, although overcapacity is difficult to improve in the short term and there are expectations of a stop falling and rebound in related raw material prices, cost support is expected to gradually strengthen, and anode material prices may gradually enter a stable operation phase.
This week, supported by stable cost and supply dynamics, the natural graphite anode material market maintained a steady price trend. Looking ahead, accelerated technological innovation in artificial graphite anodes continues to narrow the performance gap with natural graphite anodes in key metrics such as specific capacity and cycle life. Downstream customers, driven by cost reduction and performance upgrade requirements, are gradually shifting procurement preferences toward artificial graphite anodes, significantly squeezing market demand for natural graphite anodes. Consequently, natural graphite anode material prices are expected to face sustained downward pressure in the long term.

Separator:

Separator market prices remained stable overall this week. Specific price trends: Wet-process separator mainstream quotations: 5μm at 1.35 yuan/m², 7μm at 0.76 yuan/m², and 9μm at 0.74 yuan/m². Dry-process separator mainstream quotations: 12μm at 0.45 yuan/m² and 16μm at 0.44 yuan/m². On the supply side, prolonged capacity release cycles have left accumulated production capacity not yet fully absorbed, maintaining a supply surplus pattern. Demand-side structural differentiation emerged: weaker-than-expected power battery demand contrasted with better-than-projected ESS sector performance, resulting in a slight MoM increase in overall industry demand through offsetting effects. Given current supply-demand balance, separator prices are expected to remain stable in the near term with limited volatility.

Electrolyte

: This week, electrolyte prices remained temporarily stable. On the cost side, core raw material LiPF6 prices declined slightly, solvent prices rose moderately due to upstream petrochemical product cost pass-through, while additive prices remained stable. Overall electrolyte manufacturing costs showed no significant fluctuations, maintaining relative cost stability. On the demand side, seasonal factors led to mediocre auto sales performance in the NEV market, causing a slight MoM decline in power battery demand. However, overseas ESS demand growth in the energy storage sector kept overall demand relatively stable. On the supply side, electrolyte producers continued operating under "produce based on sales" models. Despite persistently low market prices, some producers selectively abandoned low-margin or loss-making orders due to profitability concerns. Nevertheless, structural industry overcapacity maintained significant competitive pressures, compelling some companies to adopt volume discount strategies. Considering these factors, electrolyte prices are expected to fluctuate rangebound in the near future.

Sodium-ion battery: This week, the sodium-ion battery market showed positive development momentum.

Taking NFPP (sodium iron pyrophosphate) as an example, its production capacity continues ramping up with increasing shipments. Downstream demand primarily focuses on ESS and start-stop applications. As NFPP capacity gradually releases, economies of scale emerge, leading to further cost reductions and steady declines in per-ton prices. This price advantage enhances sodium-ion batteries' competitiveness in the broader battery market, encouraging more enterprises and consumers to adopt sodium-ion products and driving market expansion.

Recycling: This week, disassembly recycling market prices for ternary and LCO black mass rebounded slightly. Cobalt sulphate prices continued rising, nickel sulphate prices remained basically stable, and lithium carbonate prices rebounded moderately with volatile movements.

Coefficient ratios for ternary/LCO black mass remained unchanged, with slight increases in cobalt coefficients and continued declines in lithium coefficients. Lithium prices for LFP pole piece black mass stood at 2,150-2,300 yuan/mtu, and 1,950-2,100 yuan/mtu for LFP battery black mass. On the demand side, most tertiary/LFP wet-process recyclers maintained stable monthly procurement volumes while depleting inventories, resulting in sluggish market transactions. On the supply side, grinding mills and traders' selling price expectations softened amid falling salt prices, causing black mass prices to track salt price declines. Except for leading integrated wet-process recyclers, most wet-process segment profits remain below breakeven levels.

Downstream & Terminal

: This week, DC-side battery cabin prices remained stable. Average prices: 0.432 yuan/Wh for 5MWh units and 0.437 yuan/Wh for 3.44/3.77MWh units. Provinces continue implementing mechanisms and policies for ESS participation in power markets, with owners and integrators adopting wait-and-see stances. The ESS market remains stable overall with minimal DC-side battery cabin price fluctuations. SMM expects prices to remain stable in the short term.

On June 23, the bid winner for the EPC contract of Changyuan Rongyuan's 200MW/400MWh standalone ESS project was announced. To be constructed in Xinxiang's Changyuan City, the project's winning bid came to 283.6 million yuan, translating to 0.709 yuan/Wh.

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News   

: [Tianyuan Co.: Company's LFP cathode materials can be used for solid-state battery production] Tianyuan stated on its interactive platform that its lithium iron phosphate cathode materials are applicable for solid-state battery production. The company will monitor emerging technological and product development directions while maintaining technical reserves according to its strategic planning.
[Far East Smart Energy: Solid-State Battery Products in Small-Trial Phase, Semi-Solid-State Battery Market Promotion Launched] Far East Smart Energy stated on its interactive platform that solid-state battery-related products are currently in the small-trial sample development stage, while semi-solid-state battery products have completed development and officially initiated market promotion efforts. In the future, Far East Battery will deploy full-tab 21700, 4680, and 4695 large cylindrical batteries in key sectors, paired with solid-state battery systems, to meet customer demands for high C-rate, high specific energy, and long driving range batteries.
[Sun Xiaohong, CCCME: China's Auto Exports Expected to Reach 7 Million Units This Year] Sun Xiaohong, Secretary General of the Automobile Internationalization Committee of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, indicated that customs data shows China's auto exports reached 6.4 million units last year. Projecting a 10% growth rate, this year's auto export volume is expected to reach 7 million units. Should exports maintain over 10% growth, China's auto exports could hit 10 million units by 2030.

SMM New Energy Research Team

Cong Wang 021-51666838

Rui Ma 021-51595780

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Disheng Feng 021-51666714

Yanlin Lyu 021-20707875

Zhicheng Zhou 021-51666711

Zihan Wang 021-51666914

Jie Wang 021-51595902

He Zhang 021-20707850

Haohan Zhang 021-51666752

Bolun Chen 021-51666836

Mengqi Xu 021-20707868