Analysis of Cobalt Lithium New Energy Market and Price Cycle

Analysis of Cobalt Lithium New Energy Market and Price Cycle

Lithium ore:

This week, lithium carbonate prices have significantly increased month on month, while mineral prices have also risen synchronously. Upstream overseas mining sentiment continues to rise; Other holders continue to hold high prices and have a limited amount of available spot goods, resulting in a strong reluctance to sell; Due to good demand, downstream lithium salt factories are currently maintaining a high demand for raw materials in order to maintain early production scheduling. They have a strong willingness to inquire and purchase, and the market is relatively active. The overall market mineral prices have risen along with lithium carbonate.

Lithium carbonate:

This week, the lithium carbonate market has shown a pattern of steadily rising spot prices and fluctuating futures ranges. In terms of price, spot prices have continued to rise this week. As of October 23rd, the SMM battery grade lithium carbonate index price has risen from 73991 yuan/ton at the beginning of the week to 74821 yuan/ton, with a cumulative increase of 830 yuan/ton. Battery grade lithium carbonate costs 7400-75600 yuan/ton, with an average price of 74800 yuan/ton, and a cumulative increase of 800 yuan/ton compared to Monday; Industrial grade lithium carbonate costs 71950-7315 yuan/ton, with an average price of 72550 yuan/ton, and a cumulative increase of 800 yuan/ton compared to Monday. On the supply side, the operating rate of lithium salt plants remains high. Both the spodumene end and the salt lake end have new production lines put into operation, and it is expected that the total production of lithium carbonate will still have growth potential in October, and the market supply will steadily increase. In terms of demand, the sustained strong performance of the main downstream players is the core driving force supporting the price increase this week. The field of power batteries benefits from the synchronous rapid growth of the commercial and passenger markets for new energy vehicles; The energy storage market continues to maintain a situation of strong supply and demand. The current operating rate of downstream material factories continues to rise, and their procurement demand has provided support for spot transactions. Overall, the expectation of destocking supported by demand will provide solid support for the bottom of prices, and it is expected that lithium carbonate prices will remain strong in the short term.

Lithium hydroxide:

This week, the price of lithium hydroxide has rebounded from the previous week's decline. In terms of production, some lithium salt factories have seen a slight increase in lithium hydroxide production in recent months due to the current growth in demand and the small price difference between carbon and hydrogen; In terms of market sentiment, lithium salt factories have a tight inventory due to an increase in downstream and battery cell factories' pick-up volume, resulting in a shortage of available bulk cargo for trading. Therefore, the reluctance to sell this inventory has persisted, and the quotation has followed the market sentiment to some extent; Downstream ternary material factories are currently purchasing mostly for basic needs and making up for inventory. With the recovery of lithium carbonate prices, there has been an increase in inquiries in the overall lithium hydroxide market. In recent months, the export volume of lithium hydroxide has rebounded as expected, and the overall supply and demand performance is relatively tight. The market is experiencing a continuous trend of destocking. The overall spot circulation is average, and market prices may rebound with lithium carbonate.

Electrolytic cobalt:

This week, there has been a significant fluctuation in the price of electrolytic cobalt, but from the perspective of actual supply and demand structure, the fundamental changes in the market are limited. In terms of supply, smelting enterprises continue to suspend quotations due to tight raw material inventory; Although traders followed the market and raised spot prices, their trading performance was sluggish due to the rapid rise in cobalt prices at the beginning of the week. In order to promote actual transactions, some traders have gradually lowered their quotation benchmarks from a slight premium in the early stage to a flat or even slightly discounted state. In terms of demand, downstream enterprises still focus on essential procurement, and there has been no significant increase in overall transaction volume. In response to the phenomenon of market price correction in the second half of this week, in addition to the influence of financial behavior, analysis suggests that it is mainly driven by three factors: firstly, after the price of electrolytic cobalt rises, the profit margin for reverse melting into cobalt salt narrows, and the purchasing willingness of smelting enterprises decreases; Secondly, although overseas electrolytic cobalt prices remain high, their ability to bear the high domestic prices is limited; Thirdly, there are some low-priced goods circulating in the market without tickets, which suppresses mainstream prices. Overall, after this round of price increases, the price difference between electrolytic cobalt and cobalt salts has widened again. Considering that electrolytic cobalt can be used as a raw material for reverse melting into cobalt salts, it is expected that its price will gradually approach the cost line of cobalt salt reverse melting, in order to achieve a rational regression of price differences.

Intermediate products:

This week, the spot price of cobalt intermediate products maintained an upward trend. On the supply side, customs data was released on Monday, showing a slight increase in the import volume of cobalt intermediate products in September compared to the previous month. However, due to the low increase in volume compared to market demand, mainstream mining companies and traders are still optimistic about the future and will continue to suspend quotations. In terms of demand, the overall market changes are limited, and downstream smelter inquiry prices are gradually rising. However, due to the strong price support of upstream holders, actual transactions are still relatively light, and the market continues to follow the pattern of "price but no market". Considering that the domestic supply of cobalt raw materials will remain structurally tight for a long time in the future, it is expected that the prices of cobalt intermediate products will continue to have further upward momentum.

Cobalt salts (cobalt sulfate and cobalt chloride):

This week, the spot price of cobalt sulfate remained stable overall. From the supply side, the prices of smelters this week have not changed much compared to last week. The prices of intermediate cobalt sulfate enterprises have remained around 91-93000 yuan/ton, while the prices of MHP and recycling enterprises have remained around 86000-88000 yuan/ton. From the demand side, ternary precursor and tetracobalt enterprises are constrained by the rapid rise in cobalt sulfate prices, and their own orders have not been fully locked in, resulting in cautious procurement behavior; The positive electrode enterprise has completed stocking within the year, and the stocking sentiment has slightly weakened. Overall, the price of cobalt sulfate has risen rapidly since September, leading to significant differences in price expectations among upstream and downstream enterprises. It is expected that the market will enter a game stage in the short term, and the price of cobalt sulfate may remain stable, waiting for downstream to gradually digest and accept the current price level.

This week, the market activity of cobalt chloride has significantly increased, with the mainstream quotation range of smelters being 105000-110000 yuan/ton, and the actual transaction price concentrated between 102000-105000 yuan/ton. Although the transaction price has slightly decreased compared to previous market expectations, mainly due to the accumulation of a certain amount of inventory in the positive electrode material and battery cell sectors, and the slowing down of downstream procurement pace in the context of price stabilization, the wait-and-see sentiment has increased. However, at the current price level slightly above 100000 yuan/ton, downstream acceptance is still high, reflecting that the price has certain support.

Cobalt salt (cobalt trioxide):

In terms of cobalt oxide, the enterprise's quotation remains at 340000 to 360000 yuan/ton, but there is some resistance to price transmission in actual transactions. The transaction volume between some enterprises and long-term cooperative customers is still around 340000 yuan/ton, but there are also enterprises whose individual transactions have reached a high of 360000 yuan/ton. With the combined effect of cost support and demand pull, it is expected that the mainstream transaction price will gradually stabilize in the range of 350000 to 360000 yuan/ton next week.

Nickel sulfate:

As of Thursday this week, the SMM battery grade nickel sulfate index price is 28439/ton, and the quotation range for battery grade nickel sulfate is 28450-28650 yuan/ton, with an average price unchanged from last week.  

From the demand side, spot transactions in the middle of the month have relatively decreased, and some downstream manufacturers have started to inquire about raw materials for next month, with price acceptance remaining stable compared to last week; From the supply side, nickel salt factories have basically sold out of spot goods, coupled with the pressure of high raw material costs, supporting nickel salt quotations to remain high. In terms of inventory, the inventory index of upstream nickel salt plants remained stable for 3.9 days this week, while the inventory index of downstream precursor plants fell from 8.4 days to 7.7 days. The overall inventory levels of both buyers and sellers were low, and the inventory index of integrated enterprises fell from 6.8 days to 6.5 days; In terms of buying and selling strength, the upstream nickel salt factory's shipment sentiment factor remained at 1.6 this week, while the downstream precursor factory's procurement sentiment factor rose from 3.0 to 3.1. Some companies began to inquire about raw materials for next month, and the sentiment factor of integrated enterprises remained at 2.7. (Historical data can be queried by logging into the database)

Ternary precursor:

This week, the price of ternary precursors continued to rise slightly. In terms of raw materials, the price of nickel sulfate remains stable, manganese sulfate has slightly increased, and although the price of cobalt sulfate continues to rise, the increase has significantly narrowed compared to last week. At present, the spot supply of nickel sulfate is tight, and the quotation of cobalt sulfate is still at a high level, supporting the firm quotation of precursor manufacturers. As the fluctuation range of raw material prices narrows and the traditional downstream procurement node approaches the end of the month, market activity has increased. The downstream inquiry willingness has increased, and the enthusiasm of precursor manufacturers to quote has also increased. The acceptance of price increases by downstream enterprises has increased compared to last week. Positive electrode material manufacturers with rigid procurement needs have gradually made partial purchases, and individual discounts have been significantly increased. As the end of the year approaches, manufacturers will gradually initiate negotiations on business conditions for long-term orders next year, and it is expected that the price trend will become clearer around the end of the month. In terms of demand, the power market has shown strong demand recently, with particularly prominent orders for mid to high nickel materials from top precursor manufacturers. The growth in sales of some overseas car models has also driven corresponding demand. The overall demand in the consumer market remains stable, and the rise in cobalt prices has also to some extent driven related orders.

Three element materials:

This week, the overall price of ternary materials continued to rise. From a cost perspective, the price of nickel sulfate remains stable, while manganese sulfate has slightly increased. Although cobalt sulfate continues to rise, the increase has significantly narrowed compared to before. The prices of lithium carbonate and lithium hydroxide have also slightly increased, jointly driving up the cost and price strength of ternary materials. Due to the sustained high price of cobalt sulfate, the price of 5 series ternary materials has risen rapidly, and some product quotations have exceeded those of high nickel models. The continuous increase in the cost of 5 series products may have a certain degree of suppression on their demand in the consumer and small power markets, and some downstream battery cell manufacturers have begun to consider turning to other alternative models. The fluctuation range of raw material prices has narrowed this week, and mainstream manufacturers have generally resumed quoting. However, the current quoting level is still generally higher than the psychological expectations of downstream battery cell companies, and it is expected that the market acceptance will still take some time to digest. As the end of the year approaches, some companies are about to start preliminary negotiations on the business conditions for long-term orders next year, and it is expected that the price trend will become clearer by the end of this month. In terms of demand, the domestic power market demand continues to improve, and some overseas car models have also performed well. The production schedule of top material companies has significantly increased; In addition, the rise in cobalt prices has also driven some orders to be placed in advance. The overall demand in the consumer market is relatively flat, with 6 series ternary material orders performing relatively well.

Lithium iron phosphate:

The price of lithium iron phosphate has shown a clear upward trend this week, with an average increase of about 600 yuan/ton, while the price of lithium carbonate has increased by about 1450 yuan/ton this week. In terms of production, material factories have been actively producing this week, with some leading material factories experiencing insufficient production capacity, especially for high-voltage lithium iron phosphate materials, which are even tighter. New production capacity will be gradually introduced next year. Recently, there has been a strong call from lithium iron phosphate enterprises for a price increase in processing fees. Negotiations and games with battery cell factories have been launched, and downstream battery cell factories have a strong and firm attitude. However, it is expected that the overall price increase trend will be relatively clear, and the final result is still to be observed. Downstream battery cell factories have seen overall growth, but the growth mainly comes from top battery cell factories, mainly concentrated in the commercial vehicle field, with a significant increase in demand. Other battery cell factories have also performed well in overall production scheduling, and there has been no decrease in production scheduling. It is expected that the production growth rate in October will remain above 5%.

Iron phosphate:

The market price of iron phosphate has remained stable this week, and the industry is still in the peak trading season. Approaching the end of month negotiation node, coupled with the previously released willingness of iron phosphate enterprises to adjust prices, it is expected that the new order quotation may see an increase of around 100 yuan/ton by the end of this month. However, the procurement budget of downstream lithium iron phosphate enterprises has not been adjusted yet, so whether the price of iron phosphate can be raised as scheduled still depends on the outcome of the game between upstream and downstream enterprises. On the raw material side, the prices of industrial ammonium, phosphoric acid, and ferrous sulfate have remained stable recently, providing relatively stable support for the cost side of iron phosphate.

Lithium cobalt oxide:

The lithium cobalt oxide market has shown strong performance, with the transaction price of conventional products rising to over 370000 yuan/ton. The current price increase is mainly driven by the transmission of raw material cobalt chloride and cobalt trioxide prices, as well as the strong demand from battery cell companies. At present, the demand for cathode materials in the downstream, especially in the consumer electronics sector, is expected to remain strong from November to December, supporting the continued strength of lithium cobalt oxide prices. It is expected that the price of lithium cobalt oxide will remain firm in the short term and has the potential for further upward movement.

negative pole:

This week, the price of domestic artificial graphite negative electrode materials remained stable. On the cost side, the increase in raw material procurement prices provides support for the price of artificial graphite; On the supply and demand side, downstream market demand is still in a strong state, which positively drives prices. However, the overall capacity utilization rate of the negative electrode industry is still at a relatively low level. The two forces are playing against each other, with one going against the other, ultimately causing the price of artificial graphite negative electrode materials to remain in a stalemate this week. Looking ahead, the downstream market is likely to maintain a strong demand for artificial graphite negative electrodes before the end of the traditional sales peak season, providing direct demand support for prices; The cost pressure continues, and the upstream raw material prices of artificial graphite continue to rise. The two will jointly form effective price stability support for the subsequent artificial graphite negative electrode material prices.

This week, the price of natural graphite negative electrode materials in China has stopped falling and stabilized. On the supply and demand side, as the weather gradually cools down, natural graphite buyers enter the stocking stage, downstream demand slightly increases, and the pattern of oversupply is slightly improved; On the cost side, the stable prices of upstream raw materials provide solid support for the price of natural graphite negative electrode materials. Looking ahead to the future, the decrease in temperature will lead to a tightening of raw material supply, and downstream enterprises will continue to stock up seasonally, which may provide some support for prices in the short term. However, due to the difficulty in changing the pattern of oversupply, it is expected that the price of natural graphite negative electrode materials will still lack significant upward momentum in the future, and will mainly operate steadily.

the diaphragm:

The diaphragm market has been running steadily this week, with prices of various specifications of products remaining within a reasonable range. From the specific price performance, the price of 5 μ m products in wet process membranes remains stable, the mainstream quotation range for 7 μ m products is 0.98-1.16 yuan/square meter, and the mainstream quotation range for 9 μ m products is 0.71-0.84 yuan/square meter; In terms of dry process membranes, the mainstream quotations for 12 μ m and 16 μ m products have remained stable at 0.45 yuan/square meter and 0.44 yuan/square meter, respectively. It is worth noting that a new round of price adjustments has basically reached a consensus with downstream battery cell companies, which reflects the enhanced bargaining power of diaphragm companies in the industry chain. Looking ahead to the future, it is expected that diaphragm prices will maintain a stable to strong trend.

electrolyte

The price of electrolyte is temporarily stable this week. From a cost perspective, lithium hexafluorophosphate has been affected by the supply shortage caused by the growth in demand, and the market supply-demand contradiction continues to intensify: some enterprises have fallen into a state of out of stock and suspended external quotations; Enterprises that still have sources of goods continue to increase their prices, even though the current market transaction volume is limited, sporadic transactions still contribute to the rise in the price of lithium hexafluorophosphate. At the same time, the prices of core additives such as VC and FEC continue to rise under strong demand, directly leading to significant pressure on electrolyte production costs. However, cost transmission takes time, and the supply and demand sides are still in the price game stage. From the demand side perspective, with the continuous promotion of pure electric heavy-duty trucks and the traditional peak sales season of "Golden September and Silver October" for automobiles, the growth of terminal demand is leading upwards to the electrolyte link, directly promoting the overall demand for electrolytes. From the supply side perspective, the growth in downstream demand has driven the operating rate of electrolyte companies to increase. However, due to the tight supply of upstream raw materials and the current lower than expected electrolyte prices, some companies have chosen to moderately control orders; However, the long-term overcapacity pattern in the industry has not fundamentally changed, and the overall market output can still cover downstream demand. The continuous accumulation of comprehensive cost pressures and dynamic changes in supply and demand relationships are expected to lead to an increase in electrolyte prices in the future.