Battery metals price slide weighs on black mass buying sentiment in Asia

Market sentiment for black mass sales to Asia was hit by weakening battery metal prices in the week to Friday June 14, but solid demand from the expanding South Korean market was lending support to the payables, sources told Fastmarkets

London Metal Exchange nickel cash official prices have remained below $18,000 per tonne over the past week, while Fastmarkets’ price assessments for cobalt standard grade in-whs Rotterdam and the lithium carbonate 99.5% Li2CO3 min, battery grade spot price both incurred downtrends over the last seven days.

“Sentiment in the market for battery raw materials has been bearish in recent days, but black mass payables remained rangebound. [And] newcomers in the market were actively seeking black mass from Europe and we also have to compete with them,” a South Korean consumer source told Fastmarkets on Wednesday.

“Some buyers can pay higher payables for black mass because they need the raw material to get their facilities running. But we still need to consider our cost levels, so we can’t pay as high as them – especially when weaker lithium prices are squeezing our margins,” the source added.

An Indian exporter source said demand has slowed.

“Every seller wants to sell, but buyers don’t want to pay [high payables],” the source said.

A European trader source said that he had seen markets shrink over the past few weeks amid falling metals prices and declining sentiment. He said he expected Asian consumers to pay no more than around 75% CIF for payables of nickel and cobalt in NCM black mass this week.

Origin price variations

Offer prices for nickel cobalt manganese (NCM) black mass tended to differ wildly based on the origin in the week to Friday.

Offers for NCM black mass from the US were heard as high as 80% CIF South Korea for payables of nickel and cobalt, including the value of lithium, while a second trader source from Europe said that European black mass was being “discounted,” with EU offers heard at 72% CIF Korea on the same basis.

A European consumer source pointed out that the lack of local capacity to consume black mass in the EU, together with difficulties in exporting hazardous waste-categorized black mass, meant that the South Korean market was one of the only reliable outlets for the material, and Koreans had greater pricing power on it.

European NCM black mass in the intra-EU market was being traded at around 60% EXW Europe for payables of nickel and cobalt over the last week, the second trader said, but that material with notifications set up for export or material categorized as product status could attract payables around 65%.

A bid was heard for NCM black mass with around 21% nickel content at around 60% EXW Germany for payables of nickel and cobalt this week. The European consumer source said that workable prices would be 50-55% EXW Europe depending on the content of the impurities in black mass.

Indian NCM black mass with 12% nickel and 8% cobalt was heard to be workable at 69-70% CIF Southeast Asia for payables of nickel and cobalt including the value of lithium but the material was below Fastmarkets’ specifications as it contained less than 15% nickel.

Deals done in Korea

Some deals for nickel cobalt manganese (NCM) black mass were heard concluded at payables of 70-72% CIF South Korea during the week for nickel and cobalt with lithium value included. The origin was not disclosed by the buyer, but was believed to be from either Europe or India.

Other sources said that certain South Korean buyers could accept up to 76% CIF for payables of nickel and cobalt including value of lithium in US-origin NCM black mass with nickel content of 15-25%.

Recent deals between a US exporter and Korean importer were heard done at payables of 72-75% CIF Korea for nickel and cobalt including value of lithium.

Key market participants believed that 70-76% CIF for payables of nickel and cobalt was the maximum level that South Korean buyers could accept for NCM black mass in the week to Wednesday May 12, including the value of lithium.

Fastmarkets’ weekly assessments of the black mass, NCM/NCA, payable indicator, nickel, cif South Korea, % payable LME nickel cash official price and of the black mass, NCM/NCA, payable indicator, cobalt, cif South Korea, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both 68-74% on June 12, widening from 70-73% a week earlier.

The weekly assessment of the 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 3-5% on Wednesday, unchanged week on week.

Transactions for high-cobalt lithium cobalt oxide (LCO) black mass from India were heard concluded at 66% CIF Southeast Asia for cobalt during the week, including the value of lithium. Indian material was also heard sold at the same payables to Southeast Asia, but the Indian exporter source said that Korean buyers would only accept 64% CIF on the same basis.

Market participants estimated the prevailing market level for similar material to South Korea at 64-67% CIF for cobalt on Wednesday, including the value of lithium.

Fastmarkets’ assessment of the black mass, LCO, payable indicator, cobalt, cif South Korea, % payable Fastmarkets’ standard-grade cobalt price (low-end), was 62-65% on June 12, down from 63-67% on June 5.

And the weekly assessment of the black mass, LCO, payable indicator, lithium, cif South Korea, % payable Fastmarkets’ lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea, was 3-5% on Wednesday, similarly unchanged week on week.

For ultra-high-grade NCM black powder with lithium content of 6-7%, offers were heard at 90% CIF South Korea for nickel and cobalt, value of lithium included.

Buying ideas for such material were heard at 85-90% CIF on Wednesday.

“Black mass is quite expensive right now compared to black powder,” a second Korean buying source told Fastmarkets.

Southeast Asia

Deals for high-grade NCM black mass material into alternative Asian markets were heard at much higher payables over the past week despite weakening metals prices and poor nickel sulfate sentiment in China, which is a key barometer for Southeast Asian sentiment.

US-origin NCM black mass was heard sold to Southeast Asia at 85% CIF for nickel and cobalt, including the value of lithium, but the deal was not included in Fastmarkets’ weekly assessments for the Southeast Asia black mass market because the nickel content in the cargo was outside the specification. The cargo contains 29% nickel, 7% Cobalt, and 5% lithium, according to sources.

Fastmarkets’ methodology for CIF South Korea and Southeast Asia NCM black mass specifies 15-25% nickel, 5-15% cobalt and 3-5% lithium, with a maximum of 2% copper and 2% aluminium content. It also stipulates that the material must be dry and free-flowing.

A second US-origin deal for NCM black mass with around 23% nickel content was heard concluded at around 85% CIF Asia for nickel and cobalt and around 4-5% for lithium payables, but was not included in the price assessment because it was not delivered to a country included in Fastmarkets’ methodology.

A Chinese trading source said that both of these levels were not currently workable for the CIF Southeast Asia market based on material fitting Fastmarkets’ methodology criteria. He said that 77% CIF Southeast Asia for nickel and cobalt, including the value of lithium, was the maximum workable level for spot trading of NCM black mass to the region.

A Southeast Asian consumer said he was able to pay 64-73% CIF for payables of nickel and cobalt in NCM black mass, depending on content. Prevailing lithium payables in the market remain at 3-5% of Fastmarkets’ lithium carbonate spot battery-grade price.

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