In the major China market, some recycled metals producers which typically use black mass were now bidding for cobalt hydroxide instead, due to the current costs of black mass, Fastmarkets heard from Chinese sources on Thursday.
There was also more confidence in the forward curve for primary nickel and cobalt products rather than black mass, because of the poor recent performance of lithium prices, according to a major trader source.
“Recyclers in China want primary mixed hydroxide precipitate [MHP] or cobalt hydroxide because the downside risk is lower for these materials than buying black mass,” he said.
Nickel-cobalt-manganese (NCM) black mass – under Fastmarkets’ methodology for the CIF South Korea market – contains 15-25% nickel, while the content of nickel in Fastmarkets’ nickel MHP methodology is 30-45%.
Fastmarkets assessed the price for black mass, NCM/NCA, payable indicator, nickel, cif South Korea, % payable LME Nickel cash official price, and the price for black mass, NCM/NCA, payable indicator, cobalt, cif South Korea, % payable Fastmarkets’ standard-grade cobalt price (low-end), both at 65-70% on September 27, both also unchanged week on week.
Meanwhile, the most recent assessment of the nickel mixed hydroxide precipitate payable indicator, % London Metal Exchange, cif China, Japan and South Korea, was 74-76% on September 22, up week on week from 73-75%.
Despite the recent rise in MHP, current payables meant that producing MHP from black mass was quite uneconomical in the current environment, according to a major black mass producer.
This was particularly because recyclers in countries such as South Korea were reported to be struggling to attract a premium for their recycled battery raw materials, amid low metal demand.
A major Southeast Asian black mass buyer source also told Fastmarkets this week that he wanted to switch to buying more scrap batteries than black mass, due to current high prices for the powder. A black mass seller in Europe was willing to give him a discount to purchase a greater volume of material into next year, because of their bearish view on the market, he added.
Generally, and similarly to the more conventional scrap metal markets, larger volumes of black mass equate to higher payables and prices, due to the time and cost involved in collecting the material.
Prices for NCM batteries were heard around $2,500 per tonne CIF Southeast Asia this week, while lithium cobalt oxide (LCO) batteries were heard at $2,700 per tonne.
Based on Fastmarkets’ current payables for the CIF South Korea NCM/NCA black mass market on September 27, and the underlying daily metals prices for nickel, cobalt and lithium on September 28, the mid-point price of black mass would work out at $4,914 per tonne CIF Korea on Thursday.
Stalemate in black mass markets
The sustained drop in lithium prices led to further bearishness on the part of South Korean buyers.
“Along with the global slowdown in electric vehicle [EV] sales, buying sentiment for recycled metal is bearish – just like the lithium market – which leads to lower black mass demand,” a major Korean buyer source said.
“Nothing much has happened in the market [recently], and it will be pretty quiet for a week because South Korea will have its long autumn festival holiday from Thursday to next Tuesday,” he added.
“Demand for black mass has dropped to the bottom,” a second Korean buyer source said, “and it seems that nobody is eager to buy low-quality material.”
Because of the low-demand environment, market sources have told Fastmarkets in recent weeks that buyers in Asia have begun to insist on certain terms, such as lower impurity levels, for the black mass they purchase. This might include maximum 1% aluminium and copper contents in the powder.
Buyers in South Korea have told Fastmarkets that they reduced their bid prices this week, but those on the sell-side remained largely resolute on their pricing.
A second trader source said that he was “resisting the lower prices” and had raised his offer price this week for NCM black mass to 77% CIF South Korea for nickel and cobalt, including the value of lithium.
Despite the lower bids, deals have still been agreed around stable levels, he said. Deals were heard last week at 72-73% CIF Korea on the same basis. An Indian seller source said that the maximum workable level into Korea would be around 71-72% CIF for nickel and cobalt, including lithium.
“There is not much activity,” a third trader source said. “I don’t see a big move on payables on black mass, and MHP and lithium seem to have bottomed-out. Patience is required.”
An offer of black mass from North America was heard at 70% CIF South Korea for nickel and cobalt payables, with 10% CIF for lithium payables.
Over the week to September 27, sources said that the lithium payable that was workable in the South Korea market had been stable at low levels due to low lithium prices. “The value of lithium in black mass is greater than 0% but less than 10%, currently,” the second South Korean buyer said.
Fastmarkets’ 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.
Ultra-high grade US-origin black powder with content of 32% nickel, 9% cobalt and 6.3% lithium, which is outside of Fastmarkets’ specifications, was offered at payables of 95% for nickel and cobalt, with 30% for lithium, but was not heard sold.
Black powder was also heard offered to Southeast Asia at 99% CIF for nickel and cobalt including lithium this week. For standard NCM black mass, as defined by Fastmarkets’ methodology, Southeast Asian consumers could accept 70-75% CIF for nickel and cobalt including lithium, according to the buyer source in the region.
Material from Europe was heard offered into Southeast Asia at 65% CIF for nickel and cobalt, with no value given for lithium on the material.
Fastmarkets’ price assessments for black mass, NCM/NCA payable indicator, nickel, cif Southeast Asia, % payable LME nickel cash official price, and for black mass, NCM/NCA payable indicator, cobalt, cif Southeast Asia, % payable Fastmarkets’ standard-grade cobalt price (low-end), were both 66-70% on September 27, both also unchanged week on week.
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