Rising consumption capacity in South Korea for the shredded, sorted lithium-ion batteries has led to greater intake of material to the CIF Korea market over the last month, with this dash for tonnage also eating away at supply of good quality, dried material.
Stronger LME nickel prices during the month, added to small increases to Fastmarkets’ CIF CJK lithium carbonate spot battery price and stronger buying interest from some Southeast Asian buyers, also raised sentiment among sellers of black mass.
Korea market moves up
Deals were heard for nickel cobalt manganese (NCM) black mass at payables of 69-75% CIF South Korea for nickel and cobalt including value of lithium over the month, depending on origin and quality.
The highest deal for NCM black mass was heard on April 10 at payables of 75% CIF Korea for nickel and cobalt including the value of lithium for Europe-origin material.
The increase to demand together with tighter supply in key seller nations meant that some suppliers have been asking buyers to accept separate lithium payables as part of their deals, Fastmarkets heard.
But buyers in the Asian market generally prefer to pay for the value of lithium rolled into their nickel and cobalt payables, which reduces transparency. Since lithium prices fell sharply in the second half of 2023, the majority of deals heard into Asia were using the aforementioned model for two payables.
But with the recent changes to demand and supply balances, deals for NCM black mass into South Korea were heard of late including lithium payables of 4% CIF basis Fastmarkets’ lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea, with nickel and cobalt payables at around 70%.
“We are buying some black mass with lithium payables but not much. However, some sellers want to get more of these deals, so we may increase [this type of transaction] to support them,” a major Korean consumer source said.
“The lithium payable is a problem for suppliers and consumers of black mass. A formula for nickel, cobalt and lithium would protect both buyers and sellers,” a Southeast Asia consumer source said.
“More sellers are asking for lithium payables- so we have been back and forth on this this year,” a major trading source said.
But the approach remains unwelcome to some Korean buyers who are unable to recover lithium in their processes.
Offers of NCM black mass have risen to 75-85% CIF South Korea for nickel and cobalt at the end of April, including the value of lithium, compared with 75-80% CIF one month before.
Fastmarkets’ daily price for NCM/NCA, inferred, cif South Korea averaged $4,583.27 per tonne in April 2024, up compared with $4,271.08 per tonne in March.
The average Fastmarkets payables assessments for black mass, NCM/NCA, payable indicator, nickel, cif South Korea, % payable LME nickel cash official price and black mass, NCM/NCA, payable indicator, cobalt, cif South Korea, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both 70.38% in April, compared with 67.19% for March.
The average Fastmarkets payable 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 unchanged month on month at 4% in April.
European supply tighter
Higher demand from Asia led to stronger payables in Europe over April too, with some sources reporting a tighter supply of good quality, dried NCM.
“Korean [buyers] are buying more black mass from Europe due to a lack of feedstock in Korea, which might increase the overall payable in Europe,” a European consumer source said during the month.
Despite the tighter supply dynamic, European payables remained far below those in Asia in April due to logistics costs and documentation needed to ship to Asia, as well as quality differences and gaps in both payment times in Europe, according to market sources.
Furthermore, a lack of local consumers means that EU material still tends to be exported, with sales often taking place to Asia or North America.
The average Fastmarkets payables assessments for black mass, NCM/NCA, payable indicator, nickel, domestic, exw Europe, % payable LME Nickel cash official price and of the black mass, NCM/NCA, payable indicator, cobalt, domestic, exw Europe, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both 52.88% for April, compared with 49% in March.
Fastmarkets’ daily price for black mass, NCM/NCA, inferred, exw Europe, was $3,348.54 per tonne in April, up compared with $3,068.46 per tonne in March.
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