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Most battery raw materials prices continued to trend downward over the week, pumping further pessimism into black mass markets.
Further declines were recorded in Fastmarkets’ cobalt standard grade and lithium carbonate price assessments which are used as benchmarks in valuing black mass, while London Metal Exchange nickel recovered after a dismal start to the week.
Poor metal margins caused by the low prices have led to some recyclers in South Korea reducing their consumption of scrap batteries and black mass in recent months, several market participants told Fastmarkets.
“Demand is very poor and people are cutting back on production. Many traders are coming into the market [with material] ready for prompt shipment,” one Korean trading source said, adding that he had even received an offer for around 500 tonnes of material on prompt shipment recently, but had no interest in taking it.
There is a huge gap between the expectations of black mass sellers and buyers. Even at these levels there are no deals and the difference between bids and offers is around 10%.
“We got further requests from suppliers wanting to sell black mass short term. So I think overall, companies are sat on quite a lot of black mass in Europe with no one to buy here, plus exporting to South Korea and China seems to get more difficult,” a European consumer source said this week.
With falling demand and payables, two sources said they had companies opting against completing payment for materials in the black mass market.
“We have seen some material which was meant to go to Korea defaulted on,” a European trader source said on Wednesday.
“We have heard of some defaults with some companies feeling it is better to pay the penalty for defaulting rather than [performing] the contract,” the Korean trader said.
Offers from suppliers for nickel-cobalt-manganese (NCM) black mass were heard mostly in the range of payables of 70-75% CIF South Korea and Southeast Asia for nickel and cobalt, including the value of lithium.
Bids were heard at payables of 60-65% CIF South Korea for nickel and cobalt, including the value of lithium in NCM black mass, while estimates of tradeable market levels were heard at 67-70% CIF.
In Southeast Asia, bids were heard as low as 62% CIF for nickel and cobalt, including the value of lithium.
Fastmarkets’ South Korean black mass payable assessments calculate lithium separately from its nickel and cobalt payables, following demand from the market.
Fastmarkets’ price assessments for black mass, NCM/NCA payable indicator, nickel, cif South Korea, % payable LME nickel cash official price, and for black mass, NCM/NCA, payable indicator, cobalt, cif South Korea, % payable Fastmarkets’ standard-grade cobalt price (low-end), were both at 64-67% on November 29, down 3 percentage points from 67-70% one week prior.
The assessment for black mass, NCM/NCA, payable indicator, lithium, cif South Korea, % payable Fastmarkets’ lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea,was 4-5% on Wednesday, unchanged week on week.
At current payable levels and lithium prices, Fastmarkets calculates the cost of lithium in NCM/NCA black mass in the South Korea market at around $170-175 per tonne.
“Everything is going down and it is coming to a point where there is almost no value to lithium in black mass for the [Southeast Asian] market,” the European trader source said.
“As the lithium price is dropping, people mostly don’t apply the lithium payable now [so] it is very tricky,” a second Korean trading source said.
In the European domestic market, bids were heard at payables of 40-50% EXW for nickel and cobalt for NCM black mass, while tradeable levels were heard at 55-60% EXW for NCM and LCO black mass.
Payables are constrained in Europe due to the lack of local buyers and uncertainty over exports of the material given impending rule changes which may take place next year re-classifying the material as a hazardous waste.
Keep up to date with global market insights and predictions for the battery recycling market with the Fastmarkets NewGen Battery Recycling Outlook.