[SMM Cobalt-Lithium Morning Meeting Summary] Post-holiday lithium chemical trends diverge; LFP demand improves, materials market under pressure

Lithium ore:

The lithium ore market showed signs of stabilization this week, with spot offers from miners rebounding slightly after the holiday and the previous trend of continuous inventory buildup easing somewhat. On the supply side, the concentrated arrival of Australian lithium ore in September boosted domestic spot resources, but entering October, shipments and arrivals from Australian mines are expected to slow seasonally. Port inventories remained basically stable, while inventories held by traders and cargo available for sale saw some destocking, reflecting easing supply pressure from earlier. On the demand side, with downstream LFP and battery cell production schedules staying at relatively high levels, raw material procurement demand from lithium chemical plants remains supported. Some enterprises stepped up restocking, though purchasing capacity varied by plant size, with top-tier players showing relatively stronger ability to absorb ore supply. Meanwhile, expectations of production resumptions at overseas mines and new capacity releases persist, and the medium-term supply growth trend in the ore segment has not changed. Overall, the core tension in the lithium ore market is gradually shifting from inventory accumulation caused by earlier concentrated overseas arrivals to whether downstream actual procurement can continue to absorb existing circulating inventory. In the short term, ore prices are expected to consolidate in line with lithium carbonate, with attention focused on the sustainability of post-holiday restocking by lithium chemical plants, changes in port and trader inventories, and the match between overseas mine shipment pace and domestic actual consumption.

Lithium carbonate:

At the start of this week, SMM battery-grade lithium carbonate spot prices drifted higher compared with the previous trading day. The lithium carbonate 2701 contract opened lower today at 118,300 yuan/mt. After the open, bulls quickly entered the market, pushing prices rapidly up to around 123,500 yuan/mt before pulling back to consolidate. Around midday, bulls gained momentum again, driving prices to a session high of 125,900 yuan/mt. In the afternoon, bears kept up pressure, sending prices drifting lower in a one-sided move that gradually erased all gains. In late trading, the decline accelerated, with prices touching a low of 117,200 yuan/mt before settling near 117,300 yuan/mt, ultimately closing down 1.28% at 117,300 yuan/mt. Open interest fell by 3,025 lots. In the spot market, on the first trading day after the holiday, some downstream buyers remained cautious and wait-and-see, while some traders sharply strengthened their spot-futures price spread quotes. Actual transaction spreads largely held at pre-holiday levels. Upstream lithium chemical plants continued to hold spot orders back from selling and kept prices firm, preferring to sell more through long-term contracts with increased volumes. Domestic lithium carbonate production declined somewhat this week. By raw material, some spodumene-based enterprises reduced production due to equipment maintenance. On the salt lake side, falling temperatures led to lower output at some enterprises, while others proactively curtailed production, contributing to the decline. In the recycling segment, production continued to slide due to maintenance, and lithium extraction from slag was also constrained by raw material supply, with output likewise lower. Some enterprises have maintenance shutdowns planned in October. From the actual market transactions and inventory situation, upstream lithium chemical plants still mainly shipped under long-term contracts, with spot orders continuing to see firm price holding and reluctance to sell, compounded by slowed shipments at some enterprises during the National Day holiday, resulting in slight inventory accumulation at this stage. Downstream material plants mainly consumed pre-holiday stockpiles and long-term contract shipments during the National Day holiday, leading to significant destocking this week. Trader inventory also edged down, mainly due to downstream cargo pick-up.

Lithium hydroxide:

Before the holiday, prices for coarse-particle lithium hydroxide continued to weaken, with the daily average price falling below 120,000 yuan/mt, mainly due to pessimistic expectations for Q4 and the following year, with weak sentiment. Lithium chemical plants held prices firm and showed low willingness to sell, while material plants had sufficient pre-holiday stockpiles and limited purchases, resulting in average transactions. September production was 33,700 mt, broadly in line with expectations, with stable production schedules for major producers, though maintenance in late Q4 may cause fluctuations. Domestic power demand was sluggish, with cathode plants destocking and production schedules declining, while overseas demand was solid. In October, domestic demand recovered slightly but remained limited. Pre-holiday inventory edged down, with traders cutting prices to sell small-volume spot orders. During the holiday, mine-side production resumptions and construction, as well as the UK's alternative tariff plan on Chinese autos, may disturb sentiment. Supply and demand are expected to be slightly tight from September to October, with prices moving sideways. On the first trading day after the holiday, prices ticked up, with spot order quotes at 130,000-140,000 yuan/mt. Lithium chemical plants held prices firm with weak selling interest, while ternary cathode material plants stayed on the sidelines with weak purchasing, resulting in sluggish transactions. The standoff continued, and prices are expected to remain rangebound.

Refined cobalt:

At the start of this week, the refined cobalt market maintained a consolidation pattern.After refined cobalt futures prices fell steadily, traders raised their spot-futures price spread quotes. Currently, almost no enterprise is quoting at parity, with the minimum quoted spread at 1,000-2,000 yuan. Mainstream smelters have not adjusted prices yet, but if market prices remain at current lows, the likelihood of them lowering quotes remains high. Downstream demand remains sluggish, with enterprises still restocking only on a need-to basis. Overall, until various cobalt products stop falling and downstream forms sustained restocking, refined cobalt prices do not yet have the conditions to break out of consolidating at lows.

Intermediate products:

At the start of this week, the cobalt intermediate product market continued the sluggish pattern of no quotes, no inquiries, and no transactions, but beneath the calm, the psychological price levels of buyers and sellers were still quietly competing.On the supply side, top-tier overseas players previously announced they would purchase intermediate products in the market at $14.5/lb, with clear intent to support the market, serving as the main supporting factor. On the demand side, downstream purchasing willingness remained sluggish, with some miners and downstream enterprises indicating that, against the backdrop of persistently falling prices for other cobalt products, they could only accept prices below $13/lb at present. Currently, there remains a clear gap between the support purchase price and downstream psychological price levels. The direction of the intermediate product market after the holiday will depend on the actual transaction situation of the support purchases.

Cobalt salts (cobalt sulphate and cobalt chloride):

At the start of this week, cobalt sulphate prices continued to grind lower. Although mainstream producers maintained cobalt sulphate offers near 60,000 yuan/mt this week, actual transactions were extremely difficult, with downstream buyers still showing no purchasing interest. Some downstream players believe cobalt sulphate prices will fall below 50,000 yuan/mt in the future. Under the influence of bearish sentiment, only a few enterprises made just-in-time procurement. While MHP cobalt payables and recycled cobalt payables have yet to see new transactions, they are also trending downward overall, further weakening cost support and opening new room for smelters to cut prices and sell. Before any substantive improvement in demand emerges, the cycle of "price cuts—losses—raw material pressure—lower costs—further price cuts" is expected to continue dominating the direction of the cobalt sulphate market.

Cobalt chloride prices extended their decline this week, with the post-holiday grind lower remaining unchanged. In terms of transactions, only a very small number of spot orders were concluded in the market. Existing shipments were mostly concentrated in integrated enterprises for internal self-supply to produce their own Co3O4, while non-integrated enterprises found it almost impossible to secure spot transactions. On the supply side, demand has yet to show improvement, and the entire industry remains in a destocking phase. Cobalt chloride production fell significantly MoM in September, with production cuts becoming the primary means for producers to digest inventory pressure. Enterprises that had planned to resume production before the holiday also turned to a wait-and-see stance due to persistently weak downstream demand, and the scope of production suspensions continued to expand. On the demand side, production cuts in the downstream Co3O4 segment continued to widen, further shrinking raw material procurement demand. During the National Day holiday, market trading essentially stalled. After the holiday, sporadic inquiries increased but transactions remained sluggish, with limited room for price fluctuations. Industry participants generally shifted their focus to whether demand could see a substantive recovery after the holiday. Overall, cobalt chloride prices are expected to remain on a narrow downward trajectory in the short term.

Cobalt salts (Co3O4):

Co3O4 prices continued to decline this week. This round of declines stemmed partly from some enterprises actively offering low prices to boost performance, and partly from the mutual reinforcement of pessimistic expectations amid the overall grinding-down sentiment. On the supply side, multiple enterprises remained in production cut mode due to persistently weak downstream demand. On the demand side, existing shipments were primarily for delivering earlier long-term contracts and undertaking processing business, with new purchases nearly absent. The market had already entered a consolidation phase before the holiday, and post-holiday transactions showed no significant recovery. The price center continued to shift lower slowly, with limited room for further adjustment in the short term. Market focus has turned to demand realization after the holiday. Overall, Co3O4 prices are expected to remain on a narrow downward path in the short term.

Nickel Sulphate:

On October 8, SMM battery-grade nickel sulphate average prices declined.

Cost side, US Treasury yields stayed high, LME nickel prices fell sharply during the holiday under macro pressure, SHFE nickel saw catch-up declines today, and spot production costs for nickel sulphate dropped significantly; supply side, some producers held high inventory levels and sought production cuts to destock, with overall supply edging lower; demand side, some downstream enterprises still relied mainly on long-term contract supply, sentiment for building spot order inventory was weak, and acceptance of nickel salt prices was relatively low. Today, the Willingness to Sell Sentiment Factor for upstream nickel salt smelters was 2.1, the purchasing sentiment factor for downstream precursor producers was 2.0, and the sentiment factor for integrated enterprises was 2.2 (historical data can be queried in the database).

Looking ahead, spot market activity is expected to remain weak in the short term, and nickel sulphate prices are under overall pressure.

Ternary Cathode Precursor:

At the start of the week, ternary cathode precursor prices weakened. Today, cobalt sulphate and nickel sulphate prices both moved lower, while manganese sulphate prices held steady.

On discounts, for October and Q4 orders, some producers still showed willingness to hold coefficient levels firm due to high sulphate raw material costs earlier. On long-term contracts, some producers had already agreed on annual contracts at the beginning of the year, most producers had not yet raised coefficients, and downstream acceptance of coefficient increases for quarterly contracts was also weak. Q4 long-term contract coefficients are expected to remain stable and in the doldrums. On spot orders, given the relatively weak performance of nickel and cobalt salt prices recently, coupled with sluggish downstream demand for some producers, October order coefficients are expected to decline.

On production, top-tier producers continued to see strong export orders this month, with production schedules at high levels. However, some domestic top-tier producers saw operating rates decline due to end-use demand falling short of expectations and tight supply of key raw materials. Although this month improved slightly MoM, overall levels remained below Q3 highs.

Looking ahead, sulphate prices have yet to show a clear rebound, and new order prices will need to track actual downstream demand in Q4.

Ternary Cathode Material:

After the National Day holiday, ternary cathode material prices consolidated at lows. Raw material side, nickel sulphate and cobalt sulphate prices continued to grind lower due to weak downstream purchasing sentiment; lithium carbonate and lithium hydroxide prices consolidated at lows. On transactions, given the sharp decline in raw material prices with no signs of stopping falling, coupled with sufficient inventory at battery cell manufacturers after the holiday and a lack of large-scale restocking demand, the market remained largely in a wait-and-see mode, with cautious trading sentiment. On demand, China's EV market recovered slightly in October, but the extent was limited; the digital consumer market saw some boost from new phone launches in September, but overall demand remained weak, with no clear peak-season characteristics yet. It is expected that transactions will see a modest recovery in the middle and latter part of this month.

LFP:

During the National Day holiday, LFP market fundamentals continued to consolidate on a strong note overall, with battery cell orders performing well and production enthusiasm across the industry chain remaining high. New orders and transactions during the holiday were relatively limited, and market activity mainly reflected the continued execution of earlier orders and normal production schedules at enterprises. Currently, LFP inventories at battery cell enterprises are generally at low levels, and some battery cell manufacturers proactively stockpiled before the National Day holiday, supporting a good performance in October orders. On the supply side, leading LFP enterprises have basically ramped up their capacity to full utilization, with high-quality production lines running near full load, and cathode material enterprises showing strong production enthusiasm. However, as production release still falls short of order demand, finished product inventories at LFP enterprises continued to decline, and the industry remained in a destocking state. In terms of prices, LFP prices rose this week along with lithium carbonate prices. As of October 8, the SMM average price of LFP (powder compaction density ≥2.5g/cm³) was 50,400 yuan/mt, up about 520 yuan/mt cumulatively from the last quoted trading day of the previous week. Short-term market fundamentals are expected to remain stable and consolidate on a strong note, with attention needed on post-holiday demand realization, enterprise production ramp-up, and lithium carbonate price trends.

Iron phosphate:

Before the holiday, most enterprises had already quoted prices in advance and completed order signing, and some enterprises had basically finalized their pre-holiday orders. As a result, new orders during the National Day holiday were limited, and market trading activity was relatively subdued.However, this reduction in transactions was mainly due to front-loaded orders and does not indicate a significant weakening in downstream demand. From the production side, iron phosphate enterprises still showed strong production enthusiasm. On the one hand, overall profitability of iron phosphate remained relatively good, giving enterprises strong motivation to produce. On the other hand, downstream demand remained robust and orders were relatively sufficient, further supporting enterprises in maintaining high operating rates. In terms of prices, new order prices for iron phosphate during the National Day holiday still rose somewhat compared with September, but the increase was clearly limited, and some enterprises' new order prices were even basically flat versus September. This indicates thatincreases has moderated somewhat, and resistance to further price hikes in the market is gradually increasing.

LCO:

After the National Day holiday, China's LCO market remained weak overall. The traditional peak-season expectations that the market had been anticipating failed to materialize, and industry fundamentals remained under pressure.Upstream Co3O4 prices continued to decline, and cost support kept weakening, dragging LCO product quotes down accordingly. Supply side, Chinese cathode material producers generally maintained a cautious production schedule based on sales, with industry output remaining stable. However, demand-side weakness became more pronounced, as downstream end-user clients showed limited willingness to stockpile, with procurement dominated by small, need-based restocking. The overall pace of inventory digestion across the industry chain remained slow, and the supply-demand pattern has yet to show substantive improvement. The dual pressure from lower costs and sluggish end-use demand persists. Overall, the weak LCO market continued after the holiday, with prices drifting lower. If end-use demand fails to recover and the peak season remains absent, LCO prices still have room to decline further.

Anode:

This week, artificial graphite anode price center edged up slightly, with cost support remaining firm. Petroleum coke and needle coke prices stabilized at highs, and graphitisation tolling fees also showed a steady-to-higher trend. The supply-demand balance remained tight, with anode material orders rising steadily during the peak season and destocking progressing at producers. Anode material processing overall trended upward, though continued pressure from battery cell manufacturers to lower prices limited actual gains in artificial graphite prices. Natural graphite remained in the doldrums, with end-use demand showing no clear improvement and prices lingering near cost levels for an extended period, leaving buyers and sellers in a stalemate.

Looking ahead, cost support for artificial graphite is expected to remain solid, with end-use demand continuing to release and destocking pace unchanged, so prices still have upward momentum. Natural graphite is unlikely to see a reversal in the short term and is expected to consolidate at lows.

Separator:

During the holiday, China's separator market operated steadily, with prices holding stable.On the demand side, EV and ESS provided dual drivers, further boosted by an export rush. For EV, the auto market entered the year-end push for annual targets, with battery cell manufacturers maintaining high production schedules. New capacity for large battery cells continued to drive the shift from 7μm to 5μm. For energy storage, robust utility-scale ESS demand in China and overseas tightened supply of 9μm products. In addition, the export tax rebate for batteries will be fully eliminated from January 1, 2027, prompting accelerated production and delivery of EV and ESS battery cells within the export rush window. Some 2027 overseas demand was pulled forward to Q4, further boosting separator procurement volume. Supply-side constraints remained unchanged—wet-process capacity utilization stayed above 90%, and the inventory absorption cycle was less than one month, giving separator producers a solid basis to hold prices firm. In our assessment, the post-holiday period marks a critical Q4 window: the combination of year-end EV volume push, ESS installation rush, and export rush is driving end-use production schedules higher MoM, and the separator shortage will widen further. It is worth noting that export rush demand carries a pull-forward nature, and demand may see a phased pullback in early 2027, which is the largest medium-term uncertainty.

Electrolyte

This week, electrolyte market prices rose somewhat,mainly driven by the lagged pass-through of earlier raw material price increases.On the cost side, LiPF6 prices showed no significant fluctuation this week. Trading activity was sluggish before the National Day holiday, and with lithium carbonate raw material prices continuing to decline, overall cost support weakened. Although producers raised offers, spot order transactions were relatively limited, and prices remained stable for now. For the VC additive, although the tight supply-demand situation has not yet eased, mainstream producers kept prices stable from a long-term business strategy perspective, given that industry profits remain at a relatively high level. For solvents, upstream raw material prices have seen limited fluctuations recently, but battery-grade EC prices moved higher on downstream demand support. Overall, due to the lag in electrolyte cost pass-through, earlier raw material price increases have gradually been reflected in electrolyte prices recently. Looking ahead, against the backdrop of the traditional "September-October peak season," downstream demand is expected to maintain a certain growth momentum, which will boost electrolyte production and provide positive support for raw material demand and prices. Combined with the lagged cost pass-through effect, the electrolyte market still has some upward potential.

Sodium-ion battery:

During the National Day holiday, the sodium-ion battery industry chain largely maintained its pre-holiday pattern, with no notable changes.On the materials side, mainstream cathode producers carried out staggered production as planned: some companies began maintenance shutdowns from mid-holiday, with toll processing entities ensuring supply continuity, and core client order deliveries were unaffected. Construction of newly signed 10kt-scale production lines progressed normally. On the anode side, some companies proceeded with debugging and trial production preparations for new production lines as planned, with the timeline unchanged—targeting production readiness by late October and batch delivery by mid-November. Raw material prices were generally stable during the holiday, with phosphorus-based raw materials remaining at lows after earlier declines, bamboo-based raw material prices stable, and coconut shell carbon holding at pre-holiday levels. On the battery cell side, the "September-October peak season" delivery pace continued, with clear guidance for energy storage projects to complete grid connection before year-end. Mainstream product prices remained around 0.6 Yuan/Wh, with no new price adjustments.

Recycling:

On the raw material side, lithium carbonate prices opened lower and rebounded on the first trading day after the holiday,with spot price center edging up slightly from pre-holiday levels and stabilizing initially above 120,000 yuan/mt. Nickel sulphate prices extended their weak trend with a slight decline, while cobalt sulphate prices continued to fall. Today, by ternary/LCO and LFP material types, for LFP hydrometallurgy: taking LFP electrode black mass as an example, current LFP electrode black mass prices are 5,800-6,250 yuan per % lithium, up 50 yuan per % lithium MoM from pre-holiday levels—downstream restocking demand resumed after the holiday, with inquiry activity clearly recovering from pre-holiday levels, though the market remains largely in a wait-and-see mode regarding October production schedules, and actual transactions have yet to pick up significantly. LFP battery black mass prices are currently 5,050-5,450 yuan per % lithium, with the price spread versus electrode black mass holding at a high level of around 750-800 yuan per % lithium. For ternary and LCO, ternary electrode black mass nickel and cobalt payables are around 72.5-74%, stable on the first day after the holiday, with some high-nickel 8-series and 9-series ternary electrode black mass transactions still at around 76-77%. LCO electrode black mass cobalt and lithium payables are 69.5-71.5%, and LCO battery black mass cobalt and lithium payables are 66-69%. At present, secondary cobalt sulphate prices continue to decline, and downstream LCO hydrometallurgy enterprises remain very cautious in purchasing, with sluggish market transactions and prices persistently below the ternary segment.

Downstream and end-use:

This week, overseas battery cabins increasingly entered negotiations for next year's projects,with Europe delivering in the form of large battery cells, as the corresponding system prices for large cells are expected to be 5%-10% lower than conventional 5MWh solutions. As a result, some companies are actually showing a downward price trend. On September 17, the winning candidates for the 297MW/1188MWh LFP battery energy storage system equipment procurement for the Weichang Deyu grid-side standalone ESS comprehensive demonstration project were announced. Details are as follows: First winning candidate: Tianjin Ruiyuan Electric Co., Ltd., unit price: 0.5215 Yuan/Wh; Second winning candidate: Sungrow Power Supply Co., Ltd., unit price: 0.5111 Yuan/Wh; Third winning candidate: Shenzhen Clou Electronics Co., Ltd., unit price: 0.52 Yuan/Wh

News:    

[GFEX releases announcement on soliciting public comments on lithium hydroxide futures and options contracts and related rules]GFEX released an announcement on soliciting public comments on lithium hydroxide futures and options contracts and related rules. According to the lithium hydroxide futures and options business rules (draft for comments), the trading unit for lithium hydroxide futures contracts is 1 mt/lot. The quotation unit for lithium hydroxide futures contracts is yuan (RMB)/mt. The minimum price fluctuation for lithium hydroxide futures contracts is 20 yuan/mt. The maximum order quantity per transaction for lithium hydroxide futures contracts is 1,000 lots, and the minimum is 1 lot. The exchange may adjust these based on market conditions and issue a separate announcement. The daily price limit for lithium hydroxide futures contracts in months before the delivery month is 5% of the previous trading day's settlement price, and 7% in the delivery month.

[Goldman Sachs names CATL and Zenergy as key picks in China's battery sector]Goldman Sachs named CATL and Zenergy as key picks in China's battery sector, and believes that as EV and energy storage demand continues to grow, industry share will further concentrate toward companies with scale, technology, and cost advantages. Among them, CATL remains the sector's top pick. Goldman Sachs believes the company's power battery business has a solid profitability foundation, with more important future growth coming from energy storage and integrated energy solutions. As the business extends from pure battery cell sales to system integration and services, per-project value and profit margins are expected to improve. The bank gave CATL H-shares a 12-month target price of HK$947 and A-shares a target price of 565 yuan. For Zenergy, Goldman Sachs is positive on its continued market share gains through client expansion, capacity utilization rate improvement, and energy storage business development, and expects its future EBITDA growth to potentially rank among the top of covered battery companies. Goldman Sachs maintained its Buy rating and HK$9 target price. (Jin10 Data APP)

[Pakistan: Middle East oil crisis accelerating EV transition]A senior Pakistani government official said that as oil prices surge and the appeal of switching to gasoline-powered vehicles diminishes for consumers, Pakistan is expected to achieve its EV popularization targets ahead of schedule. Under the policy announced last year, the government aims for EVs to account for 30% of new auto sales by 2030. Haroon Akhtar, advisor to Pakistan's Prime Minister on industry and production affairs, said that rising fuel costs since the outbreak of the Middle East conflict have shortened the time needed for consumers to recoup the higher purchase cost of EVs. He said: "I think the targets we set in the EV policy last year will be achieved earlier, because rising oil prices have shortened the EV cost recovery period to one to one and a half years. People are now beginning to realize the benefits—no longer having to pay for gasoline." (Jin10 Data APP)

Data source statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM's internal database models, and are for reference only and do not constitute decision-making advice.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Lin Ziya 86-2151666902

Feng Disheng 021-51666714

Lyu Yanlin 021-20707875

Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

Wang Jie 021-51595902

Zhang Haohan 021-51666752

Chen Bolin 021-51666836

Xu Mengqi 021-20707868