【SMM Analysis】Weekly Hydromet Update: Minor Salt Price Gains, Mixed Black Mass Rates

This week, prices for salt products such as cobalt sulfate and lithium carbonate saw slight increases, while nickel sulfate prices mainly fluctuated, experiencing a minor dip driven by declining nickel prices. The nickel and cobalt recovery rates for black mass like ternary and lithium cobalt oxide remained largely stable, while the lithium recovery rate saw a slight increase. The lithium point price for LFP black mass also continued to rise. Currently, the lithium point price for LFP cathode black mass is RMB 2,200-2,350 per lithium point, and for LFP battery black mass it is RMB 2,000-2,200 per lithium point, representing an increase of RMB 50 per lithium point compared to last week.

Taking ternary black mass as an example: Currently, the nickel-cobalt recovery rate for ternary cathode black mass is 71.5-74%, and the lithium recovery rate is 68-70.5%. For ternary battery black mass, the nickel-cobalt recovery rate is 69-71%.

On the demand side, LFP hydrometallurgical plants remain largely in a semi-halted state, mostly performing contract processing. The recent price increase in lithium carbonate has spurred some purchasing interest among customers. However, LFP hydrometallurgical lithium extraction profits are still below the break-even line. Furthermore, with the upcoming opening of black mass imports/exports next month, LFP black mass supply is expected to remain low in imports due to underdeveloped overseas LFP recycling systems and the lack of economic viability for lithium extraction in the short term.

On the ternary hydrometallurgical demand side, most tier-1 and tier-2 ternary hydrometallurgical plants maintain normal purchasing, slightly adjusting their purchase recovery rates in line with salt prices. However, some tier-3 and tier-4 hydrometallurgical enterprises have kept their recycling lines halted. Overall market activity remains subdued.

On the LFP hydrometallurgical demand side (repeated emphasis), most LFP hydrometallurgical plants are essentially in a semi-halted state, only performing some contract processing and not making external purchases. On the supply side, crushing plants and traders have shown some softening in their target selling prices as salt prices continue to rise. Black mass prices have largely followed the upward trend in salt prices, but market activity remains light.

On the cost side, with the recent rebound in salt prices, profits for extracting salts from externally sourced lithium cobalt oxide black mass have returned above the break-even line, except for leading integrated hydrometallurgical plants. Profits for ternary and LFP hydrometallurgical operations, however, remain below the break-even line. While crushing operations maintain slightly better profits than hydrometallurgy, some small and medium-sized crushing plants continue to experience losses.