Negotiations on Discounts for Long-Term Contracts Still Require Time [SMM Ternary Cathode Material Market Weekly Review]

Ternary cathode material prices remained at high levels this week. On the raw material side, prices for nickel sulphate, cobalt sulphate, and manganese sulphate rose further, while lithium carbonate and lithium hydroxide prices also stayed high, collectively pushing up costs for cathode plants. Currently, producers are still negotiating long-term supply agreements for next year. As most upstream raw material discounts have not been finalised, discount negotiations between cathode plants and battery cell manufacturers will take time.

Demand side, affected by the rapid short-term rise in lithium chemical prices, downstream battery cell manufacturers generally adopted a wait-and-see attitude, focusing on digesting existing inventory and maintaining only essential purchases, resulting in sluggish market trading activity. Some producers started pre-Chinese New Year stockpiling, while others remained in a destocking phase. Looking ahead, demand in January is expected to see limited decline due to pre-holiday stockpiling by some producers; however, entering February, the industry will generally face significant production cuts due to the Chinese New Year holiday and logistics disruptions.

Price side, although lithium chemical prices may see a correction later, cobalt sulphate prices are expected to remain firm, and ternary cathode material prices are likely to stay within a relatively high range.