Battery raw materials market update September 2024

Oversupply dampens market sentiment
Lithium prices and spodumene prices are trending downward as oversupply dampens market sentiment.

Chinese producers showing restraint
There are early signs of restraint among producers in China; however, more action is needed for the market to achieve balance. 

Producers planning future expansions
On a positive note, many producers are still planning future expansions, which will be essential as the market inevitably grows in the coming years.

Cobalt supply continues to outpace demand
In the third quarter of 2024, supply continues to outpace demand throughout the cobalt value chain.

Metal production as a result of weakness in cobalt sulfate market
The ongoing weakness in the cobalt sulfate market has led refiners in China to continue to produce metal, further weakening the China and seaborne metal prices. 

CMOC signals positive sentiment for H2 2024
Despite these bearish fundamentals, CMOC, the world’s largest producer of cobalt, signalled positive sentiment in H2 2024 with expectations of supply pressure easing before year end.

Battery-grade prices rangebound
Battery-grade manganese sulfate prices have been rangebound through August with limited spot buying. 

Manganese sulfate prices unreactive despite high-grade ore price correction
A downward correction in Chinese high-grade manganese ore prices did little to adjust the manganese sulfate market with prices unreactive. 

Spot buying slow, downstream orders limited
Spot buying remains slow with limited downstream orders from the NCM pCAM market. 

Chinese flake graphite prices edge higher
Flake graphite prices in China edged higher in August, despite weaker demand from anode producers, indicating that prices have reached their bottom. 

Anode production slows
Anode producers have slowed down production after strong Q2, which has put pressure on anode feedstock prices namely spherical graphite and petroleum coke. 

Overcapacity will weigh on active anode material prices
Chinese anode producers have indicated that active anode material prices are at their bottom, however overcapacity will continue to weigh on prices going upwards. 

Market in ‘wait-and-see’ mode
Demand for black mass in South Korea has died down over the last seven weeks with Fastmarkets NCM, NCA cif South Korea black mass nickel and cobalt payables rangebound at 70.5-71.5% between July 17, 2024 and August 28, 2024. This is because the market is in ‘wait-and-see’ mode after early signs of lithium price recovery could indicate lithium prices have bottomed out. 

Capacity for battery recycling
There has been great political will within Europe to develop battery recycling capabilities. Despite this there is a lack of European refining capacity which we estimate accounts for 2% of the world’s total black mass refining capacity. This is in part due to the relative infancy of the industry and in part due to spiralling costs and regulatory challenges around hazardous waste disposal. The lack of domestic demand means the Fastmarkets NCM, NCA black mass nickel and cobalt payables for exw-European are 12 percentage points lower than our exw-USA equivalent.

Lack of centralized regulation could further segment market
California is leading the way in setting out legislation to implement extended producer responsibility (EPR) for end-of-life (EOL) lithium-ion batteries. Within the USA, such legislation is unlikely to occur at a federal level, instead being set by individual states. The lack of centralized regulation is likely to lead to market segmentation based on the legislative compatibility between neighbouring states. This could make it more challenging when transporting end-of-life (EOL) batteries across state borders.