【SMM Analysis】Black Mass Profitability Diverges Across Battery Chemistries

This week saw price increases for salt products like cobalt sulfate and lithium carbonate, although lithium carbonate prices declined after prior gains, resulting in overall oscillating movements. Coefficients for nickel and cobalt in ternary (NCM/NCA) and lithium cobalt oxide (LCO) black mass remained largely flat, with the lithium coefficient experiencing a slight dip following the drop in lithium carbonate prices. Lithium iron phosphate (LFP) black mass lithium point prices were essentially unchanged. Taking ternary black mass as an example: currently, ternary cathode black mass has nickel-cobalt coefficients of 72.5-75% and a lithium coefficient of 70-72%. Ternary battery black mass has nickel-cobalt coefficients of 70-72.5%. On the demand side, most LFP hydrometallurgical plants are maintaining tolling operations, and the recent lithium carbonate price hike has stimulated some customer purchasing interest.

In recent days, the immediate cost of producing lithium carbonate from LFP black mass has become profitable. For ternary hydromet demand, most hydromet plants continue normal purchasing, adjusting prices appropriately with salt costs. On the supply side, crushing plants and traders have raised their target selling prices alongside the rising salt prices, especially lithium carbonate, leading to black mass prices generally tracking the upward trend in salts, though market transactions remained subdued. Cost-wise, with the recent recovery in salt prices, profits from extracting salts from externally sourced LCO black mass have now returned above breakeven for leading integrated hydromet plants. However, profitability for ternary and LFP hydromet processing remains below the breakeven line. Crushing operations are slightly more profitable than hydrometallurgy, but some small and medium-sized crushing plants still face persistent negative margins.