"Lithium Battery Scrap Procurement Dips in August, LFP and LCO Prices Decline [SMM Analysis]"

In September, overall prices in the scrap battery cell market on the lithium battery recycling side showed a downward trend. Using SMM average prices for aluminum shell categories as a reference, from early September to September 11, the average price of ternary battery scrap with aluminum shells fell from 43,750 yuan/mt to 41,250 yuan/mt, a cumulative decline of about 5.7%; LFP with aluminum shells fell from 17,100 yuan/mt to 15,600 yuan/mt, a cumulative decline of about 8.8%; and LCO with aluminum shells fell from 76,250 yuan/mt to 70,500 yuan/mt, a cumulative decline of about 7.5%. The three aluminum shell categories are measured on the same basis and are horizontally comparable, with LFP and LCO showing the largest declines overall, while the decline in ternary batteries was relatively mild.

On the cost side, nickel, cobalt, and lithium chemical prices weakened overall in September, with the impact transmitted directly and rapidly to the used battery cell segment. Used battery cells mainly flow to crushing and smelting, with quotes essentially anchored to nickel, cobalt, and lithium chemicals. As soon as chemical prices move, battery cell prices follow suit. Lithium carbonate fell notably after entering September, pulling back roughly 10% from its intra-month high and currently finding some support at low levels. Cobalt sulfate broke the brief price stalemate from earlier, extending its decline with a cumulative drop of over 5%. Nickel sulfate remained broadly stable. The weakening raw material side directly pushed down the price center of used battery cells.

By category, ternary waste battery cells were hit by the dual impact of persistently lower cobalt sulfate prices and mediocre downstream demand, causing overall prices to drift lower. However, among the three aluminum-shell categories, they posted the smallest decline, falling by about 5.7% cumulatively. Apart from relatively limited demand-side shocks, the market circulation of ternary waste battery cells is inherently low, and the scarcity of supply gives sellers a stronger ability to hold prices firm, with the pace of price declines slowing accordingly. LFP waste battery cells moved down in tandem with lithium carbonate, with the aluminum-shell category falling by about 8.8% cumulatively, a slightly smaller decline than lithium carbonate over the same period. This was mainly supported by several factors: first, market sentiment leaned heavily toward holding back from selling, with suppliers showing low willingness to sell and very little market circulation; second, demand-side performance was moderate, with most market transactions completed at premiums; third, some enterprises made large purchases when lithium carbonate prices were high earlier, leaving them with high inventory costs. Selling at current market levels would mean clear losses, so their willingness to sell was extremely low, further tightening the supply of circulating goods. LCO waste battery cells extended their earlier downtrend, driven by cobalt sulfate breaking the deadlock and continuing to fall together with weakening lithium carbonate, with the aluminum-shell category falling by about 7.5% cumulatively, and the decline has yet to slow down.

Looking ahead, with lithium carbonate consolidating at lows and cobalt sulfate still falling, scrap battery cell prices will continue to face downward pressure in the short term. LFP categories, despite support from suppliers holding back from selling and moderate demand, have already seen significant cumulative declines. Whether they can stop falling will depend on changes in suppliers' willingness to sell. Ternary materials, supported by relatively tight supply, are expected to continue seeing smaller declines than other categories. LCO, dragged down by cobalt salts, is likely to remain weak. Going forward, attention should be paid to whether lithium carbonate can stabilize and whether the decline in cobalt sulfate narrows.