If you missed it, follow this link to listen to the free recording.

What is happening in lithium recycling that will help to generate more sustainable supplies in the future?

There are significant advances regarding the recycling of lithium, but most major recyclers expect that a more competitive industry, with reduced costs, will emerge in the next seven years.

Umicore already recycles lithium from Li-ion batteries and plans to source a sizeable amount of its lithium requirements from its recycling business. This is probably seven years away from becoming a reality, however.

In the lithium market, what quantity of material is sold on the spot market versus annual contracts?
It is hard to quantify exactly, but the contract market globally (excluding China) is about 90% of the total market, whereas the spot market accounts for 10% of business. In China, the spot market is larger, with about 20% of business being concluded on a spot basis.

What is the likelihood of cobalt being substituted by cheaper materials?
Currently, there is no risk of cobalt substitution because the most frequently used Li-ion battery technologies - such as NCA, NMC111, NMC532, NMC622, and NMC811 (which is expected to gain more acceptance in 2018) - all use cobalt.

A reduction in the use of cobalt per battery cathode is likely, though. NMC622, NMC811 and NCA are considered preferable for use in new energy vehicles, but contain less cobalt compared with NMC111, NMC 532, or any other Li-ion battery cathode such as LCO.

Efforts to reduce the cobalt content in battery cathodes were started at least 10 years ago amid concerns about cobalt sourcing.

Could you explain in more detail why Chinese cobalt sulfate supplies are so tight? Were restrictions placed on production for environmental reasons, or as a result other regulations?
The current sulfate supply tightness is partially because of the drop of the volumes of cobalt raw materials imported into China. We saw declining imports of cobalt intermediates during the second half of last year.

Although the number bounced up in January and February this year, it could be that the number is explained by different readings of wet tonnage and dry tonnages.

In August last year, we witnessed some supply tightness in cobalt sulfate. This was due to local governmental restrictions on leaching and extraction processes during environmental inspections. After the inspection team left Zhejiang province, cobalt sulfate production resumed.

At this stage, there are no specific regulation which prevent sulfate production, but if such inspections take place again in provinces where cobalt production is centralized, then we may see further disruption.

Will the nickel market be divided into two products – sulfate and ferro-nickel? When might that happen, and what might be the effect on nickel cathode prices?

We see a split between nickel sulfate and powders, which are used in batteries, and ferro-nickel, used in stainless steel. The effect on nickel cathode premiums has not been realized yet, because the electric vehicle (EV) demand has yet to materialize.

Premiums for uncut cathodes, in-warehouse Rotterdam, have not risen significantly on EV demand. Metal Bulletin last assessed the premium on Tuesday April 10 at $230-280 per tonne.

For briquettes, market participants are bullish that increased EV demand after 2020 will help to push premiums higher in the longer term. The price of briquettes, which can be crushed into nickel powder to be made into batteries, was assessed on April 10 at a steady $275-300 per tonne, up from $180-200 a year ago.

Does your nickel ore price assessment cover material from the Philippines or from Indonesia?
We assess the price of laterite ore with 1.5% nickel content on a cif China basis. The majority of trades we capture relate to ore from the Philippines and Indonesia, but our specification does not exclude other origins.

What are your views on graphite demand and pricing for the next 3-5 years?

The global graphite market was, until recently, dogged by a situation of oversupply against weak demand. This was mainly a result of China’s large supply surplus, together with falling steel production and overcapacity (consider that refractories for steelmaking still take by far the largest share of graphite output).

This pattern changed quite drastically last year, when supply from China was disrupted by environmental controls, while demand bounced back following increasing steel output and refractories usage. At the moment, we see a tight supply situation and persistent demand, which leads to strong market prices.

In terms of future demand, we expect that the battery sector (specifically linked to EVs) will be the single most important driver of graphite demand in the coming years, compared with mature markets such as refractories, metallurgy or lubricants. Batteries will take an increasing share of graphite output, irrespective of the battery chemistry, since this mineral is present in all major battery types in use today.

Battery chemistries
Do you think that NMC811 will come online any time soon?

[South Korean companies] SK and LG are both looking to introduce this type of NMC battery cathode chemistry before the end of the year. Changes to China’s subsidy policy for electric vehicles will also accelerate the adoption of battery chemistries with a higher nickel content.

What is your outlook on how battery cathode chemistries will evolve? Will nickel-only (eLNO by Johnson Matthey) cathodes be able to gain market share in the next five years?
The battery cathode chemistries are moving toward the use of higher nickel content, less cobalt and similar levels of manganese and lithium. eLNO is currently a laboratory battery cathode, so it could be several years before we see this specific technology on the streets.

The cathode batteries currently used in cars (NCA and NMC) took 30 years to develop, showing how long it can take for battery cathode technologies to move from a laboratory stage onto the roads.

Are hydrogen-powered vehicles a threat to EV market growth?
Not yet; the technology used has so far proven unstable and it is generally thought that it is suitable only for larger vehicles. It could be several years before hydrogen-powered vehicles pose a real threat to Li-ion batteries.

What is the relationship between battery chemistry and cobalt content?
According to market participants, NMC532 has about 12.6% cobalt content, NMC622 has about 10-12% and NMC811 has about 6% at the moment. Lithium content will remain at an average of 7-12% in all these battery cathodes.

If you have any other questions arising from the points covered in the web seminar, please send them to Charlotte Radford at charlotte.radford@metalbulletin.com.