【SMM Analysis】Weekly Market Update: Stable Black Mass Prices Amidst Rising Salt Costs; Profitability Pressures Persist

This week, prices for salt products such as sulfuric cobalt and sulfuric nickel continued to rise. Consequently, the nickel and cobalt coefficients for black mass like ternary and lithium cobalt oxide remained largely flat this week, and the lithium coefficient also stayed basically unchanged. The lithium point price for LFP black mass remained stable this week. Taking LFP electrode scrap black mass as an example, the current price is 26,500-28,000 RMB per lithium point. For ternary black mass, for instance, the current nickel-cobalt coefficient for ternary electrode scrap black mass is 73.5-75.5%, a slight increase of 0.5% compared to last week, while the lithium coefficient is 69-72%, also up about 1% from last week.

The primary reason lies in profitability. Currently, producing lithium carbonate by externally sourcing LFP black mass continues to be loss-making, with profit margins between -5% and -6%. Except for several newly operational LFP hydrometallurgical plants this year, most LFP recycling enterprises have production lines capable of producing lithium carbonate from other raw materials. Therefore, even with some improvement in lithium carbonate prices, most companies choose to halt procurement and production when facing losses. The situation is similar in the ternary hydrometallurgical sector, where profits are hovering around 1-3%. The lithium cobalt oxide hydrometallurgical segment performs slightly better than LFP and ternary, at around 3%.

On the supply side, following the price increases for nickel, cobalt, and lithium, upstream recyclers quickly raised prices for batteries and electrode scraps, including lithium cobalt oxide and LFP batteries. Black mass prices also increased to some extent. However, on the demand side, as this round of lithium carbonate price increases is linked to factors such as China-US trade relations and coking coal prices, most enterprises, still facing cost-price inversions, are adopting a wait-and-see approach. Most LFP hydrometallurgical plants continue to rely on OEM business from downstream customers (B-end).