[SMM Cobalt Lithium Morning Meeting Minutes] Lithium Price Consolidates and Differentiates Industry Chain, Tug-of-War between Sellers and Buyers and Destocking Pressure Coexist

Lithium Mine:

This week, lithium ore prices held up well overall. The upward shift in the price center of lithium carbonate continued to transmit to the mine side. However, as ore prices followed the rise, market contradictions gradually shifted from "tight spot supply" in the earlier period to "salt plants' ability to absorb high-priced raw materials." On the supply side, production and shipments from overseas mines remained at relatively high levels overall, but there was still a time lag between new supply shipments and the formation of tradeable spot cargo in China, leaving short-term circulating supply relatively limited. Meanwhile, against the backdrop of firm lithium prices, mines and traders improved their expectations for the outlook, and their willingness to sell at low prices further declined, tightening the actual tradeable supply in the spot market. On the demand side, salt plants' current production levels remained high, and rigid restocking demand for raw materials supported ore prices. However, after spodumene prices continued to follow the rise in lithium carbonate, the profitability of externally purchased ore smelting was compressed again, and some salt plants began to adopt a cautious approach toward purchasing high-priced ore. Therefore, current ore prices were not purely driven by a supply gap, but more reflected a pricing game under the combined effects of short-term spot tightness, mines holding prices firm, and salt plants' rigid procurement. In the near term, lithium ore prices were still expected to have some support, but further upward room would depend more on whether lithium carbonate prices could continue to rise. If lithium chemical prices shifted to consolidation, while overseas shipments and port arrivals gradually increased, salt plants' profit constraints might re-emerge as the core factor limiting ore price increases.

Lithium Carbonate:

This week, spot lithium carbonate prices first rose and then fell, showing an overall drift lower trend. In the futures market, the most-traded contract switched to the 2701 contract, with the price range consolidating from 151,800-157,500 yuan/mt at the start of the week to 149,100-154,000 yuan/mt mid-week, hitting a high of 157,800 yuan/mt before pulling back to a low of 149,100 yuan/mt. Open interest continued to increase, with distant-month capital actively participating. Market trading showed the characteristic of "active when prices fell, sluggish when prices rose." For upstream lithium chemical plants, the pace of spot order shipments adjusted with price fluctuations: when prices rose, hedging willingness increased and shipments edged up; when prices fell, shipments slowed down. Plants undergoing maintenance still mainly supplied long-term contract orders. For downstream material plants, just-in-time procurement was mainly done at lows, with strong willingness to purchase near 150,000 yuan/mt. This week, enterprises with plans for just-in-time procurement concentrated their buy-side demand during the price pullback window. However, when prices rose, their willingness to chase highs was insufficient, and a wait-and-see sentiment gradually grew. Overall, market inquiry sentiment was strong, and actual trade activity was relatively high when prices fell. On the supply side, production edged down slightly, with maintenance and production resumptions coexisting. China's lithium carbonate production edged down this week, mainly due to maintenance at salt lake-based lithium chemical plants; some producers of spodumene and lepidolite gradually resumed production after maintenance ended, while recycling production pace was largely normal. In terms of inventory changes: Some upstream lithium chemical plants that did not undergo maintenance became more willing to sell spot orders driven by prices drifting higher; plants under maintenance mainly fulfilled long-term contracts, leading to noticeable inventory reduction. Downstream material plants carried out just-in-time procurement at lower prices, and some enterprises moderately restocked when prices were relatively low. Traders maintained overall stable inventory, alongside upstream spot shipments and downstream just-in-time procurement. Looking ahead, short-term lithium carbonate prices may maintain a relatively strong pattern. In the future, close attention should be paid to the support level at the 150,000 yuan/mt mark, changes in downstream restocking pace, and whether destocking at the ore side continues.

Lithium hydroxide:

Supply side, weekly output of lithium hydroxide edged down WoW this week. Affected by a slight recovery in market sentiment, upstream plants raised their offers to above 145,000 yuan/mt, narrowing spot discounts and strengthening their mindset of holding back from selling. Demand side, buyers' psychological price level rebounded slightly driven by the sentiment recovery, with cargo pick-ups according to needs during the week, but the overall procurement pace remained cautious, and there was no concentrated restocking. In the trading sector, affected by intensified volatility in lithium carbonate futures, traders quoted at relatively low levels but actual deals were scarce, with limited transmission to the spot market.

Inventory side, salt plants destocked somewhat this week, while material plants consumed inventory through cargo pick-ups, leading to a relatively small destocking magnitude; inventory pressure mitigated at the margin but remained at reasonable levels. Overall, market sentiment recovered this week, with the gap in psychological price levels between upstream and downstream narrowing slightly from earlier, but downstream restocking pace remained just-in-time. Short-term prices are expected to move sideways, and future trends need to see whether end-use demand can release more positive signals.

Refined cobalt:

This week, refined cobalt futures continued to grind lower, with spot price center moving down further. Supply side, mid-week, under the influence of market expectations before the release of customs data, some funds traded in advance on a sharp increase in China's cobalt intermediate product imports, causing a large pullback in futures; although final imports were lower than market forecasts, prices rebounded slightly, but the rebound was very limited due to weak demand, and prices remained at relatively low levels. After the rapid price decline, most smelters and traders suspended their offers, leading to a strong wait-and-see sentiment in the market. Demand side, downstream enterprises are still in the summer break cycle, with weak purchase willingness, only maintaining small just-in-time restocking, and overall market transaction atmosphere was sluggish. In the short term, the market remains in the off-season, with limited demand support and weak market sentiment, so prices may continue to consolidate at lows. Focus on downstream restocking pace changes after the summer break.

Intermediate products:

The cobalt intermediate products market remained in a stalemate this week, with prices lacking transaction guidance. Customs data for July showed that China's cobalt intermediate product imports stood at 16,100 mt in physical content (approximately 5,000 mt in metal content), slightly below market expectations but with limited impact on the current supply-demand pattern. Miner tender target prices remained at $21-22/lb, while downstream psychological price levels had pulled back to $17-19/lb. The price spread did not narrow, and tenders continued to fail. Some miners began adjusting strategies, considering suspending direct sales and turning to toll processing to produce refined cobalt for sale. In the short term, the tug-of-war between upstream and downstream continues, and price stabilization still awaits substantial transactions.

Cobalt salt (cobalt sulphate and cobalt chloride):

The cobalt sulphate market remained in the doldrums this week, with cost support continuing to decline and the psychological price spread between buyers and sellers not narrowing. Supply-side quotes remained divergent: primary smelters, constrained by high-cost raw material inventories from earlier periods, maintained quotes at 75,000-80,000 yuan/mt, but recently the cobalt payables for MHP have fallen to around 73%, bringing current production costs down to about 70,000 yuan/mt, significantly weakening cost support. Some enterprises may consider offering discounts above 70,000 yuan/mt in the future. On the scrap side, mainstream quotations were around 93-95% of SMM's low-end prices, with some financially constrained enterprises further cutting to 68,000-70,000 yuan/mt, and occasional low-grade materials heard near 65,000 yuan/mt. Demand side showed no improvement, with Co3O4 enterprises' target prices for low-nickel cobalt sulphate lowered to 68,000-70,000 yuan/mt, and some ternary enterprises pressing medium-to-high nickel cobalt sulphate target prices to around 65,000 yuan/mt. However, the actual price spread between buyers and sellers remained wide, and transactions remained limited. In the short term, the cobalt sulphate market is still in a bottom-seeking phase, and price stabilization still awaits the release of concentrated downstream restocking demand.

This week, the cobalt chloride market remained sluggish, with actual transaction improvements lacking momentum. On the supply side, some enterprises slightly lowered offers to destock in response to financial turnover and loss reduction pressures, but low buying sentiment from downstream meant that price cuts generated very limited transaction growth. On the demand side, Co3O4 enterprises remained constrained by high inventory, and with no signs of recovery in end-use consumption, procurement pace remained stagnant. In the short term, cobalt chloride prices will continue to drift lower.

Cobalt salt (Co3O4):

This week, the Co3O4 market atmosphere remained sluggish, with sporadic transactions. Supply side, most producers continued their low-load operation strategy amid high inventory, thin margins, and persistent inventory buildup concerns. Demand side, while cathode material producers had sporadic inquiries, firm orders were scarce, and existing raw material inventory was sufficient for short-term production, with no urgency for restocking. Overall assessment, the trend of Co3O4 prices remaining under pressure and weakening in the short term is unlikely to improve.

Nickel sulphate:

As of Thursday this week, the average price of SMM battery-grade nickel sulphate declined.

Demand side, the market was generally mediocre mid-month, with some downstream enterprises primarily picking up goods under long-term contracts or still holding some raw material inventory, weak spot order stockpiling sentiment, and low acceptance of nickel salt prices; Supply side, some upstream enterprises had relatively high inventory levels and had plans to lower operating rates and seek destocking through sales. Looking ahead, the market is expected to remain focused on destocking this month, with prices overall under pressure until month-end.

Inventory side, this week the inventory index of upstream nickel salt smelters remained at 8.1 days, the inventory index of downstream precursor makers fell from 10.7 days to 10 days, and the inventory index of integrated enterprises declined from 9.9 days to 9.7 days; Buying and selling strength side, this week the Willingness to Sell Sentiment Factor of upstream nickel salt smelters remained at 2, the Purchase Sentiment Factor of downstream precursor makers remained at 2.3, and the sentiment factor of integrated enterprises remained at 2.3. (Historical data can be accessed from database query)

Ternary cathode precursor:

This week, ternary cathode precursor prices weakened, with nickel sulphate and cobalt sulphate prices declining and manganese sulphate prices edging up.

Discount side, for September and Q3 orders, some producers still had a willingness to hold prices firm due to higher raw material costs of sulphate earlier. Long-term contract side, some producers' annual contracts were already concluded at the beginning of the year, most producers' coefficients had not been raised, and downstream acceptance of coefficient increases for quarterly orders was also weak; except for some top-tier producers with certain pricing power, most producers remained broadly stable with Q2. Spot order side, given the relatively weak performance of nickel and cobalt salt prices recently, some downstream enterprises sought raw material toll processing or expanded self-production scale, and the September order coefficients are expected to remain under pressure.

Production side, export orders of top-tier producers remained good this month, with production schedules at relatively high levels; domestic top-tier producers also had high production loads, but some small and medium-sized producers still had relatively low production schedules due to the off-season.

Looking ahead, sulphate prices have not yet shown a significant rebound, and subsequent new order prices need to focus on downstream actual demand during the September-October peak season.

Ternary cathode material:

This week, ternary cathode material prices declined somewhat. Raw material side, nickel sulphate prices continued to weaken, cobalt sulphate prices saw a relatively sharp decline, while lithium carbonate and lithium hydroxide stayed at a phase high with large price fluctuations. In terms of transaction sentiment, as cobalt prices still had downside room and the subsequent trend of lithium chemicals remained unclear, battery cell manufacturers showed weak willingness to restock this week, transactions were relatively sluggish, and the market mainly focused on fulfilling existing orders. Demand side, some battery cell manufacturers in China’s EV market temporarily slowed their cargo pick-up pace, mainly because automaker orders were weaker than expected; export orders remained at a relatively high level and are expected to continue improving. In the consumer market, conditions remained mediocre recently with no sign of improvement. Notably, demand for 9-series materials performed well in recent months, with the share rising quickly.

LFP:

This week, China’s LFP market maintained a relatively high level of momentum.Price side, this week only lithium carbonate prices and LFP processing fees saw notable changes, while LFP prices overall stayed stable. Production side, LFP enterprises were proactive in production, downstream demand remained robust, and orders increased significantly. However, effective operating rates for LFP were nearly at full capacity, still making it difficult to meet total industry orders. Battery cell production schedules in August and September were both higher than LFP production schedules, and the industry showed a tight balance where demand exceeded supply. In addition, the number-one factor constraining LFP production was undersupply of iron phosphate. In August and September, non-integrated LFP enterprises generally faced difficulties purchasing iron phosphate, and iron phosphate supply was also relatively tight, with producers prioritising deliveries to clients offering higher prices. Days of inventories in the cathode material industry fell from 10–11 days to 7–8 days, showing a clear destocking pace. In terms of enterprise developments, top-tier players largely abandoned low value-added first-calcination materials and fully shifted to high-compaction second-calcination products. New capacity was mainly for Gen 3.5 to Gen 4 materials, benefiting from accelerated production ramp-up of large battery cells for commercial vehicles and energy storage. Cathode suppliers’ bargaining power gradually strengthened: they allocated more incremental capacity to battery cell manufacturers willing to accept price increases, while only maintaining basic supply for clients that kept pushing processing fees down; as a result, some battery cell manufacturers that did not raise prices “could not buy materials.” Looking ahead, the pattern of demand being stronger than supply in the short term is expected to continue. It is recommended to watch the ramp-up progress of new production lines at top-tier players, iron phosphate price trends, and the progress of price-increase negotiations by battery cell manufacturers.

Iron phosphate:

This week, SMM iron phosphate prices stayed temporarily stable, and upstream and downstream enterprises basically concluded negotiations, with prices not rising further. Raw material side, phosphoric acid prices edged down this week, with transaction prices at around 8,200-8,600 yuan/mt; ferrous sulphate market prices remained at around 750-800 yuan/mt; monoammonium phosphate (MAP) prices held firm at around 7,000-7,500 yuan/mt. Overall prices were still in a slow downtrend. This month, end-use demand continued to increase. Affected by relatively tight supply, downstream enterprises were at a slight disadvantage in negotiations, and declines in raw material prices still struggled to curb upstream producers’ willingness to keep raising prices. Production side, iron phosphate enterprises were proactive in production this month, but constrained by production lines and tight capacity, overall growth in August was limited. Downstream demand side, LFP demand continued to improve, and overall production is expected to increase MoM by 5%.

LCO:

This week, the LCO market showed no significant fluctuations WoW, remaining generally stable but slightly weak.Supply side, downstream demand recovered slowly, and enterprises’ production and shipments had remained at low levels since the beginning of the year. Earlier price cuts made to compete for market share significantly compressed profit margins, but had little actual effect in boosting shipments. Demand side, although battery cell production schedules rebounded slightly MoM, the boost to LCO was not transmitted smoothly. Meanwhile, downstream substitution with ternary cathode material continued to rise, further weakening demand support for LCO. Overall, LCO prices still had downside potential in the near term.

Anode:

This week, prices of artificial graphite anode material in China stayed stable.Supply and demand, the market continued the previously relatively tight supply-demand pattern, and destocking persisted. Cost side, raw material coke prices fluctuated limitedly this week, but cost pressure from earlier price increases that had not yet been fully passed through remained, and the cost-side support for anode material stayed strong. Considering supply-demand and costs, anode enterprises showed strong willingness to hold prices firm. However, after completing a round of slight price increases at the beginning of this month, quotations have entered a digestion and consolidation phase, with relatively insufficient momentum for another near-term price hike. Natural graphite was relatively weak: end-use demand remained soft, prices had long moved sideways near the cost line, and buyers and sellers were still in a stalemate tug-of-war.

Looking ahead, artificial graphite is expected to benefit from continued improvement in demand expectations, supply will gradually tighten, and prices may still rise; natural graphite, constrained by a lack of effective demand-side drivers, is likely to continue consolidating on a weak note.

Separator:

This week, separator prices continued to move sideways, and quotation ranges for products of various specifications were basically unchanged from last week.By specific quotations, mid-to-high-end wet-process separator prices were firm: 5 μm (5 μm + 2 μm) at 1.57-1.87 yuan/m², 7 μm (7 μm + 2 μm) mainstream quotations at 1.14-1.337 yuan/m², and 9 μm (9 μm + 3 μm) at 1.135-1.29 yuan/m². July-August was a digestion period after the price increase was implemented. Downstream battery cell manufacturers’ procurement pace was relatively steady, mainly digesting earlier inventory, and market trading activity was average. Fundamentally, the supply-demand gap remained, but prices had not shown a clear rise yet, mainly because battery cell manufacturers faced heavy cost pressure and had weak acceptance of further separator price increases, pushing the tug-of-war between upstream and downstream into a stalemate. Base film saw limited gains due to low-price competition from second- and third-tier enterprises, while coated products were relatively firm. In the short term, September quarterly order negotiations are the key period to break the current balance. If peak-season demand ramps up as scheduled, prices are expected to edge higher, with the realised magnitude depending on downstream acceptance.

Electrolyte

This week, electrolyte market prices stayed temporarily stable. Cost side, LiPF6 prices rose this week.This was mainly supported by improving downstream demand, while on the supply side, maintenance at a few producers and the industry’s overall operating rate already at a high level meant limited idle capacity; meanwhile, some enterprises with spare capacity showed weak willingness to ramp up production quickly. With demand improving and limited supply growth, the industry’s supply-demand pattern continued to tighten, producers’ willingness to raise prices was relatively strong, and market prices were pushed higher. Additive side, VC orders for this month were basically finalised and were currently in the delivery phase. Coupled with tight supply, most producers temporarily did not quote prices. If there is still no clear and effective supply increase in the short term, the tight supply situation is expected to intensify further, with strong momentum for subsequent price increases. Although some upstream raw material prices rose, due to a lag in price transmission, electrolyte market prices stayed temporarily stable in the short term. In terms of supply and demand, power battery enterprises began stockpiling in advance for the September-October peak season, and robust momentum in the energy storage track continued; the dual positives boosted battery cell operating rates. Electrolyte enterprises generally adopted a sales-based production strategy, following downstream order growth, and industry operating levels rose in tandem. Overall, the subsequent trend of electrolyte prices still needs continuous tracking of raw material price changes and the transmission process.

Sodium-ion battery:

This week, NFPP cathode orders for sodium-ion batteries continued to exceed enterprises’ capacity. Capacity was prioritised to ensure uninterrupted supply to core key clients, and some clients’ monthly demand was compressed.After the new line starts production in October, it will still require a trial production phase, making it difficult to quickly fill the gap in the short term. Iron phosphate prices remained at high levels, and procurement of material meeting specifications was difficult. Mainstream quotations for NFPP were 28,000-30,000 yuan/mt, while the contract price for key clients was 26,000 yuan/mt, and enterprises tried to keep prices stable without raising them. Currently, top-tier battery cell clients had strict payment performance and extremely low risk; some small and mid-sized clients faced risks of malicious non-payment and bankruptcy. Upstream suppliers cut off supply to abnormal clients and required payment before shipment to ensure cash-flow security.

Recycling:

Raw material side, this week lithium carbonate and nickel sulphate prices fluctuated, while cobalt sulphate prices continued to fall.This week, by material type (ternary, LCO, and LFP), on the LFP hydrometallurgy side: taking LFP electrode black mass as an example, the current price was 6,500-6,950 yuan per % lithium, and prices began to move down from transactions on last Thursday WoW. Meanwhile, LFP battery black mass prices were 5,700-6,150 yuan per % lithium, and the price spread versus electrode black mass gradually widened. On the ternary and LCO side, nickel and cobalt payables for ternary electrode black mass were around 75.5-77.5%. Transactions for some high-nickel series such as 8-series and 9-series ternary electrode black mass were still around 78%, but all edged down; cobalt payables for LCO electrode black mass were 74-76%, and lithium payables for LCO electrode black mass were 72-75%. At present, as secondary cobalt sulphate prices continued to move down, downstream LCO hydrometallurgy enterprises were very cautious in purchasing, market transactions were sluggish, and payables for pure-cobalt and high-cobalt black mass continued to be priced separately for cobalt and lithium; current prices were slightly lower than on the ternary side.

Downstream and end-use:

This week, prices of DC-side battery cabins in China and overseas remained generally stable.For the 200 MW/800 MWh standalone ESS project in Huocheng County, Xinjiang, the top three EPC bid candidates were CEEC Xinjiang Institute, CEEC Shaanxi Institute, and CEEC Anhui Institute, with bid unit prices of 0.98 yuan/Wh, 0.992 yuan/Wh, and 0.997 yuan/Wh, respectively.

News:   

[Azure: Unable to Verify Whether the Company Is Unitree Robotics’ Exclusive Supplier]An investor asked Azure on an interactive platform: As Unitree Robotics’ exclusive supplier of robot battery cells, Azure has ushered in a new strategic development opportunity. Can the company’s current robot battery cell capacity meet Unitree Robotics’ expansion demand? In addition, the driving range of lithium batteries for humanoid robots is generally only two to three hours at present, becoming a major pain point restricting large-scale popularization and application of humanoid robots. Has Azure achieved any technological breakthroughs in this area? In response, Azure replied: “We are unable to verify whether the company is the exclusive supplier to this client. Transactions between the company and this client are proceeding normally, and the company’s products meet the client’s technical requirements.” (Jinshi Data APP)

[Lyric: Solid-State Battery Equipment Business Fully Shifts to Client Validation and Small-Scale Delivery Stage]Lyric recently stated during a survey reception that the all-solid-state battery full-line project delivered to a top-tier automaker client had been completed and achieved phased acceptance, realising a leap from laboratory technology to a pilot line. It also separately obtained orders for key solid-state battery models and pilot lines from two top-tier battery clients, and is currently in the in-house production and assembly stage. Overall, the solid-state battery equipment business has fully shifted from the technology R&D stage to the client validation and small-scale delivery stage. (Jinshi Data APP)

[Sources: Trump Administration Plans to Cut Tariffs on Imported Canadian Cars from 25% to 15%]According to people familiar with the matter, the Trump administration was preparing to cut tariffs on imported Canadian cars from 25% to 15% as part of a broader agreement. Under the agreement, Canada would remove retaliatory trade measures taken against the US. The White House imposed a 25% tariff last year on foreign-made cars and trucks. For vehicles produced in Canada and Mexico, the tariff applies only to the non-US content in the vehicles, aiming to push companies to shift more production processes to the US. Sources said the new 15% tariff rate would also follow this “non-US content” calculation rule. At present, the specific details of the agreement have not yet been finalised. In addition, Trump has previously made last-minute changes to terms when trade agreements were about to be reached, or even cancelled agreements outright, so the final outcome remains uncertain. (Jinshi Data APP)

Data source statement: Except for public information, all other data were processed by SMM based on public information and market communication, relying on SMM’s internal database models, for reference only and not constituting decision-making advice.

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