Asian black mass buyers keep out of market amid weak lithium prices, high stocks

Black mass purchases in East and Southeast Asian markets have been hampered by lower battery raw materials metals prices and elevated inventory levels over the last week, according to sources

Continued declines in lithium prices have been joined by dropping cobalt prices since the beginning of August. This has weakened demand for black mass, with buyers further reducing bids for shredded lithium-ion battery packs recently.

Bids for nickel cobalt manganese (NCM) black mass in the key South Korean market were heard to have fallen to as low as 60-70% CIF Korea for nickel and cobalt including the value of lithium over the last week.

“South Koreans are sat on a lot of inventory, so they are low-balling. There is also no interest in lithium cobalt oxide (LCO) black mass,” according to a Singapore-based trader source on Tuesday, August 22.

“We are asking 70% CIF for nickel and cobalt including lithium for black mass and below 80% for [higher grade] black powder. But it looks like sellers are not inclined to accept this bid. [We] are not willing to buy higher than these payables unless we have to,” according to a South Korean consumer source on Wednesday, August 23.

“Black mass demand is low and prices are low as well due to lithium prices declining,” a second Korean buyer said.

In Southeast Asia, interest in NCM black mass was heard at around 75-82% CIF nickel and cobalt including the value of lithium depending on the lithium content.

Given the market situation, trading sources said that the lowest workable price for black mass to be sold into Asia would be 75% CIF nickel and cobalt including lithium value.

Sellers and traders exporting to Asia were unwilling to drop to the level of the bid prices, with some keeping offer prices at 85-87% CIF Korea and Southeast Asia for nickel and cobalt including lithium value, sources said.

“Buyers are keen to get lower prices for black mass now and payables are going a bit further down. We are in the mid 80%s, and we are resisting [further declines],” one Europe-based trader said.

But there have been examples of attempts at selling for lower prices, with one offer for US-origin NCM black mass heard in the last week with 20% nickel, 10% cobalt and 3% lithium content heard at 73% FOB for nickel and cobalt including the value of lithium, which would work out at around 76% CIF Asia after freight and handling costs, Fastmarkets heard.

Lithium payable remains low

Following demand for greater transparency from the market, Fastmarkets launched a lithium payable to its Korean black mass prices on August 16, which means that lithium’s value is no longer included in the existing nickel and cobalt payables.

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 70-75% on August 23, widening downward by 3 percentage points from 73-75% CIF one week before.

Due to recent declines in lithium prices, buyers in Asia said they have reduced their interest in paying for lithium content in black mass. The prevalence of market participants currently giving lithium payables is currently low because of the low lithium price, but this will likely change once prices for the metal rise, sources said.

Offers for lithium payables have typically been around 10-15% CIF South Korea in recent months for NCM black mass of lithium content at 3-4%, but the recent decline in lithium prices means sources have said they would not be willing to pay higher than 5% payables for lithium.

Fastmarkets’ weekly price 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.

Keep up to date with lithium prices on our dedicated lithium price page.

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