SMM Market Review: Cobalt Sale Prices Maintained Growth

SHANGHAI, Mar 7 (SMM) - Battery and downstream terminal markets: In January 2022, a total of 622,000 new energy vehicles were sold globally, a month-on-month decrease of 26% and a year-on-year increase of 93%. Among them, BEV accounts for 75% of the market, and plug-in hybrid vehicle for 25%. As the largest single market for new energy vehicles, the sales continued to grow in China. In January, a total of 419,000 vehicles were sold, a decrease of 16% MoM, and it has accounted for 67% of the global share. Musk recently tweeted that battery life is not the only criterion for new energy vehicles, which has caused controversy among netizens. In fact, there has always been a debate over the length of battery life. From the perspective of manufacturers, the current product advantages can still be maintained even if not stressing battery life, unless there is major breakthrough in battery technology. From the perspective of consumers, however, what they care more is charging speed that allows more convenience.

Refined cobalt and intermediate products: Recently, the prices of refined cobalt have been in an upward trajectory, and the current low domestic inventory is the basis for its prices hike. However, the Russian-Ukrainian war has had an impact on the non-ferrous products, so the prices would sometimes fall. But the overseas demand for refined cobalt is relatively high, driving up domestic cobalt prices. Recently, the prices of intermediate products have been rising steadily because of the rapid growth of its pricing basis — overseas prices. It has driven up the prices of intermediate products. Moreover, the instability of shipping schedules and the increase in the costs of raw material transportation due to the declaration of hazardous products have also become the reasons for the upward prices of intermediate products. 

Cobalt salt: Recently, the prices of cobalt salt continued to rise. At the raw material end, the pricing base of intermediate products has risen. And the costs of recycled battery has risen due to rising lithium prices. While the cost of cobalt salt in smelters rose as well and the overall inventory is relatively low, hence the purchased frequently, pulling up the prices. Recently, the prices of Co3O4 rose slightly. The prices of cobalt chloride too continued to rise. The prices of Co3O4 rose slightly at a high level with the support of high costs. When it was close to the end of the month, mainstream manufacturers are more willing to purchase, and the prices of Co3O4 will further increase with the costs.

Lithium Carbonate: The prices of lithium carbonate have risen rapidly. On the supply side, some manufacturers were still in overhaul during February, coupled with less working days in February, the supply remained stable. In March, the overhaul will basically end, so the supply will increase. On the demand side, there is still a small increase in the demand from downstream LFP and NMC battery. However, due to higher requirements for procurement funds, some small factories have reduced or stopped the production or even seeked tolling manufacturing. Hence the gap between supply and demand has eased. Recently, there have been fewer transactions in the market and more wait-and-see decisions. But there are still some stocking-up demand, and the prices rose rapidly. This week, there will be stronger wait-and-see sentiment because some material manufacturers have basically built the stocks for production in March. However, due to the existence of the downstream supply gap, the increase of prices may slow down.

Lithium hydroxide: The prices of lithium hydroxide have risen significantly. In terms of the supply side, some manufacturers were in overhaul during February and have not completed in March. The industry supply is still at a low level. On the demand side, due to the rapid increase in lithium prices, high-nickel orders from leading battery factories have been advanced. The high-nickel product manufacturers' demand for lithium hydroxide increased. The overall supply was still in great deficit. And lithium hydroxide prices rose much faster than lithium carbonate. It is expected that due to the continuous increase in downstream demand, lithium hydroxide prices will still show a rapid upward trend.

LFP: LFP prices increased last week. The prices of phosphoric acid presented increasingly strong upside momentum recently, and the prices rose on the whole, which pushed up the quotations of some LFP enterprises. In addition, lithium salt prices have been growing quickly. The prices of LFP has rose on the cost. The procurement cost of lithium salt for LFP enterprises is approaching the 500,000 yuan/mt mark, which is close to the critical point of market acceptance. The pressure on LFP enterprises and downstream companies increased sharply, suppressing the demand. However, considering that the cost support is still there, LFP prices will continue to rise slightly.

LCO: LCO prices rose last week. Last week, LCO battery factories mostly made inquires with the prices of 560,000-570,000 yuan/mt, a significant increase. The prices of LCO materials rose along with the booming quotations of Co3O4 and lithium carbonate. The battery factories will gradually start restocking this week, and it is expected that the prices of LCO will continue to rise.