[SMM Cobalt and Lithium Morning Meeting Summary] Multiple factors, including supply and demand and costs, are in a game of balance, and the price of artificial graphite remains temporarily stable

Lithium Ore:

At the beginning of this week, lithium ore prices rose slightly WoW, primarily due to the irrational increase in lithium carbonate futures prices. This week, lithium carbonate futures prices surged significantly compared to last Friday, providing certain hedging and profit-taking opportunities for lithium chemical plants and traders, thereby driving up the acceptable lithium ore prices for buyers. Bidding prices reached or exceeded $700/mt, and market prices followed suit. Early this week, a major lepidolite supplier conducted an auction, but participation from some in-production lepidolite plants was low due to slightly high reserve prices.
Overall, lithium ore prices rose slightly at the beginning of the week and will continue to move in tandem with lithium carbonate prices.

Lithium Carbonate:

At the beginning of this week, spot lithium carbonate prices surged significantly. Regarding the document circulating in the market about the approval of eight mining enterprises in Yichun, after confirmation with relevant enterprises, it was found that the current production plans of the involved mines were unaffected, and there were no immediate plans for production suspension. Therefore, the stability of lithium carbonate supply remained unchanged. The abnormal fluctuations in futures market prices were mainly driven by short-term capital flows and had no direct correlation with the industry's fundamentals. Demand side, the current price level had significantly exceeded the general acceptance range of downstream enterprises, with only some enterprises with rigid procurement needs maintaining basic transactions, driving up prices. Supply side, despite some lithium chemical producers engaging in tentative price adjustments, the overall quotation strategy remained relatively cautious. The irrational rebound in the futures market deviated from the spot market fundamentals, urging all parties to rationally assess the actual supply and demand situation and avoid speculative hype.

Lithium Hydroxide:

At the beginning of this week, the decline in lithium hydroxide prices slowed significantly compared to last week. Market sentiment indicated limited downstream demand growth, with long-term agreements and customer-supplied materials meeting basic needs, resulting in fewer additional spot orders. Upstream, influenced by the current recovery in lithium ore prices, cost support strengthened, and sellers were reluctant to budge on prices, slowing the price decline. It is expected that in the short term, due to the significant increase in lithium carbonate and lithium ore prices, the downside room for lithium hydroxide will be limited.

Refined Cobalt:

On Monday this week, refined cobalt prices continued to drop slightly. Supply side, refined cobalt smelters maintained long-term contract supplies, with fewer spot quotations, and ex-factory prices remained unchanged due to production costs. Domestic futures market prices fell, with traders' quotations and transaction prices following suit. Demand side, due to the still high social inventory of refined cobalt and weakened downstream demand under high temperatures, most downstream producers maintained just-in-time procurement rhythms, with actual transactions remaining weak. It is expected that in the short term, refined cobalt prices will maintain a fluctuating trend, with subsequent price movements needing close attention to cost increases and social inventory digestion.

Intermediate Products:

On Monday this week, spot prices of cobalt intermediate products continued to rise, with some enterprises reporting that low-priced goods had reached 12.3-12.4, and high-priced goods were quoted below 13. Supply side, cobalt intermediate product resources were currently concentrated, with miners still suspending quotations and traders continuing to raise quotations amid expectations of price increases. Demand side, smelters faced challenges such as production cost losses and weak downstream demand. Under uncertain future conditions, most enterprises focused on consuming their own inventories, with some smelters with lower inventories inquiring about prices in the market. However, due to their quotations still being lower than sellers', market transactions remained few. Overall, influenced by the extension policy in the DRC, China's cobalt intermediate products will still face raw material shortages in the future, with prices having upward momentum. However, attention needs to be paid to the inhibition of downstream demand by rising raw material prices during this process.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

On Monday this week, cobalt sulphate prices remained stable, with market transaction prices hovering around 5-5.2, and no higher transaction prices were heard. Supply side, smelters currently maintained their prices, with some traders having limited old stocks and also raising prices. Demand side, downstream demand was differentiated, with ternary orders still not showing significant improvement. Ternary material enterprises chose to wait and see, focusing on digesting previous inventories. Co3O4 and traditional chemical enterprises had better economic performance, with some enterprises making purchases in the market. Refined cobalt procurement remained suspended due to poor economic performance. Overall, the market situation on Monday this week was roughly similar to last week. It is expected that under the influence of continued raw material cost increases, cobalt sulphate prices may continue to maintain a strong trend this week. However, during this process, the improvement of downstream ternary demand still needs to be observed.

Currently, cobalt chloride enterprises quoted prices at 61,000-63,000 yuan/mt, with market transaction volumes increasing compared to before. Supply side, smelters still had a strong wait-and-see sentiment, with few market transactions. Demand side, downstream enterprises had relatively sufficient inventory levels, actively inquiring about prices, but remained cautious about buying and selling. Prices, the current actual transaction price was around 6.2, with a few transactions at 63,000 yuan/mt. It is expected that in the short term, cobalt chloride prices will still stabilize within the 61,000-63,000 price range.

Cobalt Salts (Co3O4):

Currently, Co3O4 enterprises quoted prices between 200,000-220,000 yuan/mt, with some enterprises beginning to suspend quotations. Both upstream and downstream held wait-and-see attitudes, with few actual transactions, mostly for long-term contract deliveries. Supply side, Co3O4 plants chose to wait and see the overall market sentiment and demand, with only a small amount of shipments. Demand side, LCO cathode plants had relatively fewer inventories, but due to the recent market sentiment, they chose to wait and see. Prices, Co3O4 plants currently indicated that their shipment expectations were between 210,000-230,000 yuan/mt, but actual transactions of high-priced Co3O4 were still few. In the long term, Co3O4 prices will still be affected by cobalt inventories. Whether current industry inventories can support until December has become a key factor affecting price trends.

Nickel Sulphate:

On July 14, the SMM battery-grade nickel sulphate index price was 27,229 yuan/mt, with the quotation range for battery-grade nickel sulphate being 27,200-27,640 yuan/mt, and the average price remaining unchanged from last Friday. Cost side, nickel prices were under pressure, with nickel sulphate spot costs slightly weakening. Supply side, some producers recently had a reluctance to budge on prices, but weak demand led to fewer transactions, with nickel salt smelters having low overall inventory and production schedule levels. Demand side, although some producers recently engaged in restocking, overall buying enthusiasm was not high due to the procurement period not yet arriving. Looking ahead, with production costs falling and weak downstream demand, although nickel salt smelters continue to hold prices, nickel salt prices will still run at low levels in the short term.

Ternary Cathode Precursor:

On Monday, ternary cathode precursor prices remained stable overall. Raw material cost side, cobalt sulphate and nickel sulphate prices remained stable, with manganese sulphate prices rising slightly, but having limited impact on precursor prices. Recently, precursor prices were mainly driven by the slight increase in cobalt sulphate prices, showing a slight upward trend. Currently, the discount coefficients signed between precursor plants and downstream cathode material plants have not changed, mainly due to the continued sluggish demand in the ternary market. Downstream cathode and battery cell enterprises generally did not accept discount coefficient increases, with precursor producers lacking bargaining power in price negotiations. Demand side, the overall performance of the NEV and consumer markets was mediocre. In the domestic NEV market, only orders for medium- and high-nickel products from top-tier producers were relatively good, with orders from other producers being average. In overseas NEV markets, especially in the US, affected by the recent "Big and Beautiful" Act, ternary material demand is expected to face further pressure. Against the backdrop of weak terminal demand, ternary cathode precursor prices lack upward support.

Ternary Cathode Material:

On Monday, ternary cathode material prices showed a slight upward trend overall. Raw material cost side, nickel sulphate and lithium hydroxide prices remained stable, with manganese sulphate prices rising slightly and cobalt sulphate prices temporarily stabilizing. However, lithium carbonate prices surged due to market sentiment disturbances. Currently, the discount coefficients signed between ternary cathode material plants and downstream battery cell plants have not been adjusted, mainly due to the continued weak demand in the ternary market, with battery cell plants generally not accepting discount increases. Demand side, domestic NEV market demand for 6-series products was relatively concentrated, with orders mainly flowing to top-tier enterprises. Recently, terminal automobile sales have been mediocre, with cathode material plants focusing on maintaining existing long-term contract supplies. Against the backdrop of continued weak terminal demand and intensified market fluctuations, optimizing customer structure has become a key strategy for cathode material producers to maintain market share. Supply side, driven by the slight restocking in the July market, ternary cathode material production is expected to increase. However, in the long term, the ternary cathode material market is still in a supply surplus situation, with limited overall industry growth space.

LFP:

This week, LFP prices continued to rise from last week, with an overall increase of about 325 yuan/mt, mainly due to the continuous increase in lithium carbonate prices this week, which rose by about 1,350 yuan/mt. There were no significant changes in the market this week. Material plants maintained relatively stable production, with top-tier enterprises having a stable production rhythm and some even increasing production. Small- and medium-sized plants' production rhythms slowed slightly due to order influences. Downstream demand breakdown showed that NEV orders are expected to start decreasing this month, while ESS demand performed well, driving overall demand growth, but the growth was limited. Recently, a battery cell manufacturer began tendering, with the overall tendering progress being relatively smooth. Based on currently available information, it is expected that the price war will intensify in H2. Overall, the recent LFP market mainly revolves around tendering as the main topic of discussion, with mediocre demand and a relatively stable market situation.

Iron Phosphate:

This week, the iron phosphate market performed steadily. Some enterprises continued maintenance and capacity ramp-up, slightly affecting available capacity, but overall market supply remained loose. Recently, most enterprises' quotations did not show significant decreases. Cost side, industrial-grade MAP and phosphoric acid prices remained stable, with ferrous sulphate prices maintaining high levels. Affected by summer high temperatures, the price of auxiliary material hydrogen peroxide rose slightly, having a certain impact on iron phosphate costs.

LCO Cathode:

Recently, LCO cathode prices have increased significantly due to changes in raw material costs: battery-grade lithium carbonate prices have continued to rise, and Co3O4 prices have shown strong upward momentum due to the policy in the DRC. Supply side, Co3O4 enterprises quoted high shipment prices, with LCO cathode plants having low purchase willingness for high-priced Co3O4. Demand side, terminal demand is entering the off-season, with decreased demand for LCO cathode. Overall, LCO cathode prices will increase significantly with the rise in Co3O4 and lithium carbonate prices.

Anode:

This week, prices of artificial graphite anode materials stabilized. Demand side, the small-scale recovery in the small ESS market offset the demand gap caused by the slowdown in NEV market production speed, with relatively stable demand performance. Supply side remained abundant. Cost side, the rebound in anode raw material costs provided effective support for artificial graphite prices. Under the interplay of multiple factors, artificial graphite anode material prices became stagnant this week. Looking ahead, although the overcapacity situation is difficult to reverse in the short term, related raw material prices are expected to continue stabilizing, providing support for anode material prices to remain stable in the short term.
This week, natural graphite anode material prices maintained stable operation, a pattern sustained by coordinated supply-demand and cost-side support. Accelerated technological innovation in artificial graphite anodes, coupled with gradual capacity expansion from vapor-deposited silicon-carbon producers, prompted downstream clients to shift procurement preferences toward alternative materials amid dual pressures of cost reduction and performance upgrades—potentially compressing natural graphite anode market demand. Considering supply-demand dynamics and technological iterations, natural graphite anode material prices are expected to face sustained downward pressure.

Separator:

Separator market prices remained stable overall this week. Detailed breakdown: 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. Supply-side capacity releases faced prolonged cycles, leaving accumulated inventory undigested and perpetuating market supply surplus. Demand-side structural divergence emerged: NEV market demand fell short of expectations, while ESS sector performance exceeded prior forecasts, resulting in slight MoM demand growth after offsetting effects. Given current supply-demand balance, separator prices are expected to remain stable with limited fluctuations in the near term.

Electrolyte

: Electrolyte prices stabilized temporarily this week. Cost-side, core raw materials including LiPF6, solvents, and additives remained stable, keeping overall production costs unchanged. Demand-side, power battery demand declined slightly MoM due to inventory destocking pressures and weakened automaker production sentiment. Conversely, overseas ESS demand growth offset some weakness, leading to marginal overall demand increase. Supply-side, electrolysis producers maintained "produce-based-on-sales" operations. Despite persistent price depression, structural overcapacity intensified market competition, compelling many firms to adopt volume discount strategies. Multiple factors suggest electrolyte prices will fluctuate rangebound going forward.

Sodium-ion Battery:

Sodium-ion battery markets improved this week, with NFPP remaining the dominant cathode material amid robust order demand and continued price declines. Layered oxide shipments declined significantly year-over-year; while low-price sales occurred, cost compression limits restricted further reductions, keeping layered oxide sodium-ion cell prices stable. As sodium-ion capacity gradually releases, production line defects and recycling methods are emerging as focal points for next-stage development. Overall, the market navigates demand support versus cost pressures, with segmented product performances and emerging industry challenges.

Recycling:

This week, cobalt sulphate, lithium carbonate, and other salt products continued rising, while nickel sulphate prices fluctuated amid weak short-term demand support. Ternary and LCO black mass coefficients increased slightly. Currently, LFP pole piece black mass lithium prices stand at 2,150-2,300 yuan/mtu, and LFP battery black mass lithium prices at 1,950-2,150 yuan/mtu. Taking ternary black mass as an example: current ternary pole piece black mass nickel-cobalt coefficients are 72-74% with lithium coefficients at 68-70%, while ternary battery black mass nickel-cobalt coefficients are 70-72%, with prices basically flat WoW. On the ternary wet-process demand side, most processors maintained stable monthly procurement volumes, consuming only base inventory. Bearish lithium chemical price outlooks led to cautious black mass purchases, keeping market transactions sluggish. The LFP wet-process sector largely halted operations, engaging only in toll processing without external purchases. Supply-side, grinding mills and traders softened selling price expectations amid falling salt prices, with black mass prices tracking salt price declines. Cost-side, most wet-process operators (excluding integrated leaders) remained below profitability thresholds, particularly LFP processors impacted by lithium price drops. Grinding operations fared slightly better, though some SMEs still faced losses.

Downstream & End-Users:

This week, DC-side battery cabin prices declined slightly. Average prices: 5MWh DC-side battery cabins at 0.427 yuan/Wh; 3.44/3.77MWh units at 0.437 yuan/Wh. Post-May domestic ESS demand accelerated due to Q2 2025 policy releases (electricity market spot trading, green power interconnection) and subsidies for grid-side ESS installations in Inner Mongolia, Xinjiang, and other provinces. This drove faster battery cell and system shipments alongside lower ESS component costs, sustaining downward DC-side battery cabin price trends. SMM forecasts continued gradual price declines in the near term.

On July 7, the EPC tender results for Dapu Xianeng's 200MW/400MWh standalone ESS pilot project were announced. Located in Meizhou, Guangdong, the 36.14-acre facility will use LFP batteries with outdoor prefabricated cabin layouts for battery and power conversion systems. The winning bid of 339.948093 million yuan translates to 0.85 yuan/Wh.

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News:    

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[Yongxin Lithium Industry: Anticipated Net Loss of 116-173 Million Yuan in H1] Yongxin Lithium Industry (603399.SH) announced that it expects a net loss attributable to shareholders of 173 million yuan to 116 million yuan in H1 2025, compared to a profit of 66.8162 million yuan in the same period last year, marking a year-on-year turn to loss. The primary reasons for the performance change are the persistent oversupply in the lithium chemicals market and further declines in product prices. Despite the company's efforts to mitigate risks by increasing production, reducing costs, and enhancing efficiency, it could not offset the adverse impacts of price declines, leading to losses in the lithium chemicals business segment. (Financial Associated Press)

SMM New Energy Research Team

Cong Wang 021-51666838

Rui Ma 021-51595780

Ziya Lin 86-2151666902

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

Bolin Chen 021-51666836

Mengqi Xu 021-20707868