[SMM Cobalt Lithium Morning Meeting Minutes] Raw Material Price Divergence Intensifies, Energy Storage Demand Sustains Industry Prosperity

Lithium Ore:

This week, lithium ore prices stopped falling and edged up slightly, with market transactions still dominated by just-in-time procurement. Earlier, as lithium carbonate prices pulled back, spodumene concentrate prices corrected downwards in tandem. Recently, driven by stabilizing lithium chemical prices, the Australia SC6 CIF price rebounded slightly to around $2,100/mt, but lithium chemical plants' willingness to chase high-priced resources remained relatively limited. By region, top-tier Australian mines, relying on long-term contracts and superior resource quality, saw relatively firm prices, while African spot ore faced greater sales pressure, with the price spread between ore sources widening. On the supply side, it is noteworthy that at current ore price levels, some marginal capacity in Australia is accelerating its recovery. Bald Hill had restarted in May, and PLS's Ngungaju, with capacity of about 200,000 mt/year, entered the production resumption window in July, while Wodgina continued to ramp up production, indicating that the earlier high lithium prices are gradually translating into new ore supply. Combined with the gradual realization of production resumption expectations at Jianxiawo, the market's trading logic is shifting from earlier supply disruptions to the pace of new supply releases. It is expected that in the short term, lithium ore prices will mainly consolidate in tandem with lithium carbonate futures, with limited independent upside room for ore.

Lithium Carbonate:

This week, spot lithium carbonate prices moved sideways, and the price center moved up slightly week-on-week (WoW). The futures market consolidated on a subdued note. The most-traded contract, the 2609 contract, saw its price range shift from 143,300-148,200 yuan/mt at the start of the week to 140,600-149,400 yuan/mt, as it drifted lower. Mid-week, it peaked at 149,400 yuan/mt before pulling back, and hit a low of 140,600 yuan/mt. Open interest continued to decline, with both longs and shorts predominantly reducing positions. Market transactions displayed a pattern of "downstream purchasing as needed and upstream holding prices firm and holding back from selling," with actual transactions relatively active. Upstream lithium chemical plants showed strong sentiment to hold spot prices firm and hold back from selling, with persistently low willingness to sell. Some enterprises anchored their spot sales willingness price above 160,000 yuan/mt, and current supply mainly relied on long-term guarantee contracts and the "long-term contract + additional volume" delivery model. Downstream material plants continued their strategy of dip-buying as needed, with strong willingness to make just-in-time purchases below 145,000 yuan/mt, but limited acceptance of higher prices, and little bulk stockpiling. As it was month-end, overall procurement was steady. Traders, affected by both the upstream supply contraction and limited spot order circulation as well as downstream just-in-time procurement, continued to destock. Overall, market inquiries and actual transactions were relatively active. On the supply side, production continued to drop sharply, and upstream inventory remained low. This week, China's lithium carbonate production continued to fall sharply, notably affected by maintenance and production halts at lithium chemical plants using spodumene and lepidolite. In terms of inventory changes: Upstream lithium chemical plants maintained their strategy of holding back spot orders from selling, with persistently low willingness to sell, and with multiple enterprises entering maintenance, inventories stayed low; downstream material plants continued their just-in-time procurement pace, and with month-end procurement being steady, inventories remained basically stable; traders, affected by both upstream supply contraction and downstream just-in-time procurement, continued to destock. Bearish and bullish positions both declined in the funding space. Open interest in futures continued to decrease this week, indicating that both longs and shorts were reducing positions and exiting the market. Wait-and-see sentiment intensified, and prices lacked one-sided momentum. Looking ahead, lithium carbonate prices are likely to move sideways in the short term. Supply side, ongoing maintenance and production halts at some lithium chemical plants and tightening spodumene supplies provided support to prices, with supply contraction being the main bullish factor. Demand side, downstream purchasing on dips continued, but large-scale centralized stockpiling has yet to materialize, leaving a lack of sustained upward momentum. Going forward, attention will remain focused on the pace of maintenance recovery at lithium chemical plants, changes in downstream restocking pace, and August production schedule expectations.

Lithium Hydroxide:

This week, the average price of coarse lithium hydroxide was 133,800 yuan/mt, little changed WoW. Producers remained reluctant to quote firm offers, with sporadic fixed-price quotations only occasionally above 135,000 yuan/mt. Trading continued to operate at a discount to the September futures contract, with discounts ranging from 13,000 to 18,000 yuan/mt. Traders remained active in selling, but downstream buying interest failed to pick up.

In terms of transactions, buyer inquiries were infrequent, and actual purchases were mostly small-volume procurement for immediate needs, with large orders hard to find. After earlier restocking activities, downstream players now preferred to wait and see, with weak sentiment for proactive stockpiling. Overall, the market has yet to form an effective upward driving force. For prices to break out of the current sideways movement, clearer recovery signals from end-use consumption are still needed.

Refined Cobalt:

This week, refined cobalt spot prices continued to drift lower, showing a downward consolidation trend. Supply side, major smelters lowered their ex-factory offers to 355,000 yuan/mt, while other small and medium-sized smelters have largely suspended quoting due to growing loss pressures. After earlier sustained destocking, traders' sellable inventories have fallen to relatively low levels. Some enterprises, based on bullish expectations for the future, began to slow the pace of shipments. For the few quoting enterprises, the spot-futures price spread held at a premium of 1,000-10,000 yuan/mt. Demand side, downstream enterprises remained in their summer break cycle, generally with weak purchasing willingness, maintaining only small-scale essential restocking. Overall, from July to August is the traditional consumption off-season for refined cobalt, offering limited demand-side support, and short-term prices are likely to remain in the doldrums.

Intermediate Products:

This week, trading in the cobalt intermediate products market remained sluggish, with limited transactions and a slowly edging-lower price center. Recently, some Chinese-funded miners launched tenders for intermediate products, with intended prices already dropping below $22/lb. Affected by the continued weakening in cobalt salt and refined cobalt prices, downstream smelters and traders' psychological price levels for raw materials further retreated to around $20-21/lb, with some even only willing to accept prices below $20/lb. As a result, actual deals have yet to be concluded. In the short term, miners' willingness to hold prices firm persists, but downstream demand lacks sufficient support, the tug-of-war between the two sides continues, and price recovery still awaits the return of actual demand.

Cobalt salt (cobalt sulphate and cobalt chloride):

This week, the divergence between upstream and downstream in the cobalt sulphate market intensified further, with limited actual trading volume. Supply side, primary smelters using intermediate products and MHP for production, supported by costs, kept quotes firm above 80,000 yuan/mt; recycling enterprises, leveraging raw material cost advantages, concentrated their quotes in the 76,000-78,000 yuan/mt range, while a few enterprises active in selling could lower prices to below 75,000 yuan/mt. Demand side remained sluggish, with downstream enterprises showing insufficient purchase willingness and tending to seek non-standard or old stock sources to push down procurement costs. Recently, transactions for substandard and old stock materials at below 73,000 yuan/mt occurred in the market. After factoring in quality adjustments, the actual price difference with new products was limited, but in the weak demand environment, this price level was used by downstream as a bargaining benchmark, and some recycling enterprises followed suit in lowering prices passively. Furthermore, after the sustained drop in refined cobalt, the cost of producing cobalt sulphate via its re-dissolution has fallen to 72,000-73,000 yuan/mt, further reinforcing downstream expectations of pushing for lower prices. In the short term, the cobalt salt market is trending lower slowly, and market stabilization and recovery still await the release of concentrated restocking demand from downstream. This period is expected to occur after mid-to-late August.

This week, the cobalt chloride market continued its sluggish pattern, with trading maintained at scattered levels. Supply side, from the perspective of real-time costs, the costs from recycling materials and the re-melting route of refined cobalt have already significantly fallen below current market quotes and actual transaction prices. The key factor affecting enterprise pricing is that upstream smelters generally hold large-scale inventories, mostly high-cost inventories. Facing the continuously falling market, it is difficult to lower average costs through low-price procurement, so high-cost inventories provide some support to quotes, and quotes remain relatively firm overall. However, at the same time, some enterprises have begun to gradually lower quotes to promote shipments, attempting to gradually dilute earlier losses by accelerating turnover. However, downstream acceptance capacity is extremely limited, and even with price reductions, it is difficult to achieve significant increases in trading volume. Demand side, Co3O4 enterprises' own inventories are already at high levels, and there are no signs of demand growth, so current purchase willingness is extremely low. Overall, in the short term, cobalt chloride prices still have downside room.

Cobalt salt (Co3O4):

This week, the Co3O4 market also saw sluggish trading, with low trading volume. Supply side, with their own inventories at high levels, enterprises faced the dilemma of thin profits based on current raw material cost accounting and the risk of inventory buildup, so they generally kept production at low levels. Although there were occasional rumors of ultra-low-price sources in the market, communications with various parties indicated that while a few ultra-low-price transactions could not be denied, they were not enough to represent the mainstream market level. On the demand side, cathode plants made inquiries but actual procurement was limited, as their current raw material inventories were sufficient to support production and there was no urgent restocking demand. Overall, Co3O4 prices also had the potential to continue declining in the near term.

Nickel Sulphate:

As of this Thursday, the SMM battery-grade nickel sulphate average price held steady and edged up slightly.

From the demand side, although it was the month-end, some downstream enterprises' raw material inventories were relatively stable as Q3 contracts for July had begun delivery, leading to weak sentiment for spot stockpiling and low acceptance of nickel salt prices. From the supply side, MHP payables and auxiliary material prices remained high, some producers had expectations for production cuts, and with nickel prices gradually stabilizing, enterprises were inclined to raise offer prices. Looking ahead, the market is expected to focus on destocking this month, and nickel sulphate prices will mainly depend on the cost support from nickel prices.

On the inventory front, this week the upstream nickel salt smelter inventory index dropped (8.9 → 8.1 days), the downstream precursor plant inventory index fell (9.2 → 8.4 days), while the integrated enterprise inventory index remained at 7.6 days; in terms of buying and selling strength, the upstream nickel salt smelter Willingness to Sell Sentiment Factor held at 1.8, the downstream precursor plant purchasing sentiment factor rose (2.5 → 2.6), and the integrated enterprise sentiment factor stayed at 2.5. (Historical data can be accessed in the database)

Ternary Cathode Precursor:

This week, remained stable, while edged up, declined, and edged down.

Regarding discounts, for August and Q3 orders, some producers had the intention to raise discounts due to relatively high sulphate raw material costs earlier. For long-term contracts, some producers had already agreed on the coefficient at the beginning of the year, and no upward adjustment had occurred yet; quarterly contract buyers also showed weak acceptance of coefficient increases, keeping it generally stable compared with Q2. For spot orders, as recent nickel and cobalt salt prices were relatively weak, some downstream enterprises sought raw material toll processing, and the coefficient for August orders is expected to remain stable overall compared with July.

On the production front, top-tier producers' export orders continued to perform well this month, with production schedules at relatively high levels; China's leading producers also saw a slight recovery in production load, but some small and medium-sized producers still had relatively low production schedules due to the off-season.

Looking ahead, sulphate prices have yet to show a significant rebound, and future new order prices will need to monitor the pace of downstream stockpiling in Q3.

Ternary Cathode Material:

This week, prices of ternary cathode materials changed little and were basically stable. On the raw material side, nickel sulphate and manganese sulphate prices remained temporarily stable, cobalt sulphate transaction prices continued to decline, while lithium carbonate and lithium hydroxide were in a stage of small fluctuations. In terms of transaction sentiment, battery cell manufacturers recently maintained just-in-time procurement, and market transactions were relatively mediocre. Regarding discounts, as demand did not show further growth, battery cell manufacturers were not very receptive to the increase in discounts. Meanwhile, with the consumption tax on lithium batteries about to be resumed, battery cell manufacturers may pass on some cost pressure to upstream, making it even more difficult to increase discounts. On the demand side, the EV market in China and overseas maintained a relatively high level of demand in July, and manufacturers’ actual production did not change much from original expectations. The upcoming resumption of the consumption tax prompted some battery cell manufacturers to stockpile in advance, and orders in August were stable with slight growth. In the consumer market, demand still showed no sign of recovery and performed relatively mediocre. As the traditional September-October peak season approaches, overall demand in the ternary market is expected to have further room for growth.

LFP:

This week, LFP prices edged up by about 120 yuan/mt, mainly due to the upward shift in cost support from lithium carbonate (SMM lithium carbonate prices rose by a total of about 500 yuan/mt this week). However, the increase in LFP was significantly weaker than that of lithium chemicals, indicating that downstream acceptance of price hikes remained cautious. In terms of processing fees, the recent move by top-tier players to raise processing fees was gradually implemented, but the models diverged significantly—large battery cell manufacturers generally adopted a fixed-price model with increased base prices, not linked to phosphoric acid or iron phosphate, while small and medium-sized cell manufacturers more often chose a linkage settlement method tied to the prices of phosphoric acid or iron phosphate, reflecting major clients’ low acceptance of the linkage model, with suppliers compensating their processing margins by raising base prices. On the production side, LFP producers maintained high operating rates this week, and the pace of production ramp-up accelerated. Downstream order demand continued to increase. According to SMM surveys, demand in July mainly came from commercial vehicles and the ESS sector, driving the entire cathode material industry’s production schedule up by about 7% MoM, with good actual implementation, and production this week still steadily rising. On the inventory side, some enterprises still had orders exceeding their production capacity, and under delivery pressure, days of inventories continued to decline, with the overall industry destocking trend evident. Looking ahead to next month, downstream demand expectations remain strong, and production schedules are planned to be raised further; the total monthly production schedule for August is expected to increase by about 5% MoM.

Iron Phosphate:

This week, SMM iron phosphate prices gradually moved up. Upstream and downstream enterprises basically concluded a new round of negotiations. The intended transaction prices of upstream iron phosphate producers all increased by 200-300 yuan/mt from the previous month, while the intended purchase prices of downstream LFP producers declined, mainly because of falling raw material prices. On the raw material side, phosphoric acid prices edged down in July. Affected by a slight correction in sulphur prices and still low thermal-process acid prices, the transaction price of phosphoric acid this month was around 9,500-10,100 yuan/mt. Ferrous sulphate market prices remained at about 800 yuan/mt. Monoammonium phosphate (MAP) prices were stable. Although upstream producers had willingness to raise prices, due to price controls and low purchase willingness from downstream iron phosphate enterprises, prices found it difficult to rise, with the market price at about 7,500 yuan/mt. Production side, this week, iron phosphate enterprises maintained stable production overall, but due to overall capacity constraints, growth in July was limited. Demand side, LFP demand continued to improve, and overall, it is expected to be up 7% MoM.

LCO:

This week, the LCO market was relatively stable. Supply side, amid persistently weak demand, production and shipments of various companies have remained at relatively low levels since the beginning of the year. To compete for market share and boost shipments, enterprises had to adopt price-cutting strategies. Currently, profit margins have been significantly squeezed compared to earlier periods, but actual shipments have not shown significant improvement. Demand side, although battery cell manufacturers' production schedules picked up, the growth was not transmitted to the LCO segment. One key reason is that the proportion of downstream switching to ternary materials increased. Overall, LCO prices are more likely to remain stable.

Anode:

This week, the domestic artificial graphite market was stable overall. The supply-demand relationship maintained the previous pattern of tight effective spot supply. Cost side, raw material prices continued to climb, coupled with the not yet fully digested cost backlog from earlier periods, the cost support effect remained strong currently. Anode enterprises had strong expectations for price hikes, but due to the lagging effect of production cycles, the cost pressure from the rise in raw materials this period has not yet been fully reflected in spot prices. Natural graphite side, end-use demand was weak, downstream purchases generally pushed for lower prices, and the market trading atmosphere was subdued. However, as prices have been hovering near the cost line for a long time, the tug-of-war between sellers and buyers entered a stalemate, and further downside room is also limited.

Looking ahead, artificial graphite is expected to benefit from improving demand, tight supply, and gradual cost transmission, with the price center potentially rising steadily; natural graphite, due to insufficient demand-side drivers, will mainly consolidate on a weak note in the short term, and a breakthrough in market conditions may await new catalysts.

Separator:

This week, the separator market was stable overall. In terms of specific quotations, prices for mid-to-high-end wet-process separators were firm: 5μm (5μ+2μ) was quoted at 1.57-1.87 yuan/m², 7μm (7μ+2μ) mainstream quotation was 1.14-1.337 yuan/m², and 9μm (9μ+3μ) was quoted at 1.135-1.29 yuan/m². The period from July to August was a digest window for downstream battery cell enterprises after earlier price hikes, with procurement mainly driven by restocking needs, and there was no release of concentrated stockpiling demand yet. In terms of production scheduling pace, leading separator companies maintained full production, the overall industry operating rate remained above 80%, and supply and demand were still in a tight balance. However, further upward momentum for prices was relatively weak, mainly because the current market lacked new catalysts, with upstream and downstream sectors in a phased balance. Structurally, base film prices were constrained by the low-price strategies of second- and third-tier enterprises, with limited gains; coated products, supported by demand from energy storage and high-end NEV segments, showed relatively firm price performance. As the traditional September order negotiation cycle approaches, a new round of price negotiations will become the market focus. If downstream production schedules rise as expected MoM, combined with limited supply growth, prices are expected to see a new round of slight upward room. In the short term, separator prices will remain mainly stable.

Electrolyte

This week, electrolyte market prices rose somewhat. Cost side, this week, spot lithium carbonate prices showed no significant fluctuations, LiPF6 costs were relatively stable, and electrolyte enterprises, driven by optimistic expectations for future demand and the impact of recent continuous price rises, saw a warming in overall purchasing willingness, promoting further price increases in the market. Additive side, due to sustained demand growth, coupled with shutdowns at some VC enterprises, the industry's effective supply contracted, the tight supply-demand situation intensified further, and prices rose sharply. Solvent side, disturbed by geopolitical conflicts outside China, the rise in crude oil prices drove up the prices of raw materials for ester-based solvents such as ethylene oxide and propylene oxide, and solvent prices edged up accordingly. Currently, the rise in prices of various raw materials for electrolyte, together with continuous cost pressure transmission, pushed electrolyte prices higher. Supply-demand side, although the industry was in the traditional off-season for sales, battery enterprises, due to stockpiling demand for the Q3 peak season and high prosperity in the energy storage sector, battery cell production continued to rise, and electrolyte enterprises generally adopted a produce-based-on-sales model, with industry production rising synchronously. Overall, electrolyte price trends were strongly correlated with raw material costs. At this stage, cost pressure from the price hike of key raw materials like VC will be gradually transmitted downstream, and there were expectations for electrolyte price increases later on.

Sodium-ion battery:

This week, the full production status of sodium-ion NFPP cathodes continued, with output being shipped immediately and inventory maintained at extremely low levels. Supply elasticity was limited, and expectations for tight supply-demand in Q4 intensified. The industry is simultaneously laying out both NFPP and NFS routes, with NFS still pending verification. Hard carbon anode capacity bottlenecks were prominent. Constrained by capacity, enterprises dared not take large orders. The toll processing model could not be quickly scaled up in the short term due to large parameter variations and quality control difficulties, leading to clear price stratification. Demand side, shipments from core clients were stable, with application scenarios extending from two- and three-wheelers and start-stop products to AIDC, UPS, and electric motorcycle sectors.

Recycling:

Raw material side, this week, lithium carbonate and nickel sulphate prices fluctuated, while cobalt sulphate prices continued to fall. This week, looking at the types of ternary LCO and LFP materials, for the LFP hydrometallurgical end: taking LFP electrode black mass as an example, the current price of LFP electrode black mass was 6,250-6,700 yuan/mtu, with prices basically stable WoW from last Thursday's transactions. Meanwhile, the current price of LFP battery black mass was 5,500-5,900 yuan/mtu, with the price spread against electrode black mass gradually widening. The main reason was that multiple LFP repair enterprises were actively producing, and they primarily purchased LFP electrodes, broadening the demand for waste LFP electrode end. As a result, some LFP hydrometallurgical enterprises switched to purchasing LFP battery black mass, or purchased LFP electrode black mass at additional high prices. For the ternary and LCO end, the nickel and cobalt payables for ternary electrode black mass were around 76-79%, and the market began to see some low-price transactions, with the lower end of the range declining. Cobalt and lithium payables for pure cobalt and high-cobalt waste also edged down, and with the sustained fall in cobalt sulphate prices and sluggish end-use consumption market demand, upstream hydrometallurgical enterprises saw sluggish purchase transactions.

Downstream and End-user:

This week, prices of DC-side battery cabins in China and overseas remained stable overall. On July 29, China Coal Tendering Co., Ltd. released the public notice of bid-winning candidates for the PC general contracting project of the China Coal Group Hami Comprehensive Energy Demonstration Base ESS power station. The first candidate was Xuchang Electric Energy Storage Technology Co., Ltd., with a total bid price of 751.1861 million yuan, equivalent to a unit price of 0.5366 yuan/Wh; the second candidate was China Construction Third Engineering Bureau Group Co., Ltd., with a total bid price of 814.05 million yuan, equivalent to 0.5815 yuan/Wh; the third candidate was China Anneng Group Second Engineering Bureau Co., Ltd., with a total bid price of 828.4285 million yuan, equivalent to 0.5917 yuan/Wh.

News:    

[National Energy Administration: In H1, electricity consumption for charging and battery swapping services up 56.9% YoY] It was learned from the press conference held by the National Energy Administration today that in H1 this year, total electricity consumption increased 5.3% YoY. Service sector electricity consumption grew rapidly, with charging and battery swapping services and internet data services seeing strong growth. Xing Yiteng, Deputy Director of the Development Planning Department of the National Energy Administration, introduced that driven by the rapid development of high-tech industries such as NEVs and artificial intelligence, electricity consumption for charging and battery swapping services and internet data services grew robustly, reaching 81 billion and 49.4 billion kWh respectively, up 56.9% and 44% YoY, jointly raising total electricity consumption by 0.9 percentage points. (CCTV News)

[The First Meeting of the Sino-German Intelligent Connected Vehicle Standards and Regulations Working Group in 2026 Was Held in Beijing] According to the China Automotive Standardization Research Institute, on July 29, 2026, the National Automotive Standardization Technical Committee's Intelligent Connected Vehicle Subcommittee (SAC/TC114/SC34) and the German Association of the Automotive Industry (VDA) organized the Chinese and German automotive industries to hold the "First Meeting of the Sino-German Intelligent Connected Vehicle Standards and Regulations Working Group in 2026" in Beijing. In the context of Sino-German intelligent connected vehicle cooperation, the two delegations exchanged and discussed the research progress and implementation experiences of standards and regulations for intelligent connected vehicles, and launched a joint research project. Experts from CATARC, Equipment Center, BMW, TÜV Rheinland, and Bosch respectively communicated and exchanged on various topics including the progress of China's intelligent connected vehicle access pilot, the European DCAS framework, progress on the application guide for combined driving assistance security requirements, the implementation practice of EU automotive data regulations, parking-related standards planning and progress, and global regulation adaptation and best practices; and launched the joint research project on the standardization needs for cross-border circulation of automotive data. (Jin10 Data)

[Zhejiang Dongfang Zirconia: Our Company’s Zirconia Samples for Solid-State Battery Electrolytes Have Received Initial Recognition from R&D Trials by Some Solid-State Battery Material Manufacturers] On July 29, Zhejiang Dongfang Zirconia stated on an interactive platform while answering investors’ questions that the company's zirconia samples used for solid-state battery electrolytes have received initial recognition from R&D trials by some solid-state battery material manufacturers, and if they meet disclosure standards, the company will promptly disclose.

Data Source Statement: All data other than publicly available information is derived from public data, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute investment advice.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

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Wang Jie 021-51595902

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