Fastmarkets battery raw materials market update

Read on as Fastmarkets delves into a monthly market update, focusing on the dynamic and fast-evolving sector of battery raw materials

The Fastmarkets team consistently monitors market shifts to provide timely, accurate and valuable insights. We are committed to supporting informed decision-making with in-depth analysis of key factors driving market trends, prices and forecasts in the battery raw materials market.

Lithium: Has Europe become wrong-footed?

Key points

  1. Current strategy misalignment
    Europe is planning for a nickel, cobalt, manganese (NCM) world in terms of cathode active materials (CAM) and gigafactories. However, our electric vehicle (EV) outlook and current trends suggest that Europe should be preparing for a more balanced world between NCM and lithium iron phosphate (LFP).

  2. Affordability issues
    EVs in Europe are expensive and OEMs need to offer more affordable models. One way to achieve this is by adopting LFP batteries, a strategy already embraced by Tesla. How many others will follow suit?

  3. Gigafactory developments
    ACC’s decision to pause work at two of its three gigafactories raises questions. Could they be shifting their focus towards LFP?

What do our analysts say?

The lithium value chain in Europe is still developing off the notion that nickel based chemistries will be the chemistry of choice in the region and therefore lithium hydroxide will be the dominant lithium chemical required. But what OEM announcements have shown us and what our EV sales forecast for Europe is displaying, is that LFP/LMFP is expected to have a 34% market share by 2034.

Jordan Roberts, Fastmarkets


Cobalt: Cobalt fails to react to bullish news

Key points

  1. SRB announcement
    Sentiment picked up following China’s State Reserve Bureau (SRB’s) announcement to buy 15,000 tonnes of cobalt, significantly higher than previous years (3,000 tonnes in 2020, 8,500 tonnes in 2023).

  2. Oversupply
    This highlights the oversupply and ample availability following last year’s capacity increases in the DRC & Indonesia.

  3. Temporary disruptions
    SRB purchases may temporarily disrupt Chinese exports later this year, but given the oversupply, price increases are not guaranteed.

What do our analysts say?

Following the SRBs announcement the seaborne cobalt metal market is expected to tighten in the second half of the year with less availability of Chinese material. Whether this transfers into a significant price recovery is unlikely given the scale of the oversupply upstream on cobalt intermediates.

Rob Searle, Fastmarkets


Nickel: The nickel market has been taking a big step towards rebalancing

Key points

  1. Price recovery
    Despite recent price falls, the LME nickel cash price has recovered well in 2024, up 12.7% after a 46% decline in 2023.

  2. Supply cuts and uncertainty
    Production cuts and slower-than-expected issuance of Indonesian mining permits have supported the price recovery.

  3. Revised surplus estimates
    The International Nickel Study Group revised its 2023 estimates, indicating a lesser market surplus than initially assessed.

What do our analysts say?

The recovery in the nickel price seen so far in 2024 has been supported by supply cuts, uncertainty surrounding Indonesian mine supply growth, and expectations of a restocking bounce in nickel usage in the battery supply chain. As a result, we now forecast a much smaller market surplus this year than previously expected. The nickel market has taken a big step towards rebalancing.

Olivier Masson, Fastmarkets


Manganese: Battery-grade manganese sulfate prices buck the trend in BRM prices

Key points

  1. Supply disruptions
    Manganese prices have risen due to supply disruptions at South 32’s Gemco operation caused by cyclone damage.

  2. Subdued demand
    While demand from pCAM buyers is subdued, disruptions in high-grade manganese ore supply are affecting sulfate producers.

  3. Export delays
    Gemco will not be able to export until January 2025 at the earliest.

What do our analysts say?

Battery-grade manganese sulfate prices have risen 42% since the start of the year as a result of supply disruptions for high-grade ore out of Australia. Despite this, market participants remain wary of the ongoing weak buying from the NCM pCAM sector.

Fastmarkets


Graphite: US enforces 25% tariff on Chinese anodes

Key points

  1. Supporting local production
    The US administration is supporting North American anode production by implementing a 25% tariff on Chinese anodes.

  2. Diversification
    This will encourage diversification away from China and help build local anode capacity, essential for the US market once recent exemptions under the Inflation Reduction Act expire.

What do our analysts say?

The end of exclusions for natural and synthetic anodes under the Section 301 Tariff signals a clear intent to diversify anode supplies away from China. The 25% tariffs are essential for stimulating the development of a North American anode supply chain.

Georgi Georgiev, Fastmarkets


Huge increase in Chinese lithium production

Key points

  1. Demand priced increase
    Increased lithium demand is fully priced in as there is no shortage of supply.

  2. Production increase
    China’s LCE production from lepidolite increased by 126% year-over-year in April, with spodumene increasing 109%.

  3. Inventory accumulation
    Inventory accumulation suggests no shortage of supply, with time needed for demand to absorb the surplus.


Demand: Europe needs more affordable EVs – is LFP one of the answers?

Key points

  1. Affordability challenges
    EV demand growth in Europe has slowed. With the first adopters having bought in, OEMs are finding it harder to sell due to affordability issues. EVs in Europe are more expensive than their internal combustion engine (ICE) equivalents.

  2. Gigafactory rethink
    ACC’s decision to halt development at two European gigafactories implies a reconsideration of strategy. Will they adopt LFP technology, following the example set by China and Tesla?

What do our analysts say?

European OEMs have been slow to respond to the market demand for affordable cells and the shift to LFP. Chinese OEMs and Tesla recognized this long ago, understanding that the mass market will be unlocked by offering affordable vehicles.

Phoebe O’Hara, Fastmarkets


Recycling and black mass

Key points

  1. Robust payables
    Asian black mass payables remain robust, with NCM payables exceeding 70%, deviating from earlier lower estimates.

  2. Constrained supply
    The strong performance is due to constrained supply of high-quality black mass, particularly NCM chemistries favored in key markets like South Korea and Southeast Asia.

  3. Nickel price surge
    The rising price of nickel has created a favorable environment for recyclers, improving the economic feasibility of recycling operations.


Conclusion

The battery raw materials market is in a state of flux, with significant developments across the lithium, cobalt, nickel, manganese and graphite sectors. These changes signal both challenges and opportunities for investors, battery manufacturers and the EV industry.

Ready to deepen your understanding? Find out more about Fastmarkets’ battery raw materials insights and prices today and stay informed about all the critical developments in the battery raw materials market.

What to read next
Rapidly expanding capacity for the recycling of lithium-ion batteries in the United States and Canada has raised worries over the supply of raw materials to feed processors in the region, sources have told Fastmarkets
Chinese mining giant CMOC reported a 178% year-on-year increase in cobalt metal production for the first six months of 2024, according to an announcement by the company on Friday July 12
Analysis by UK-based industry group ChargeUK shows that there are now more than 930,000 public, home and workplace charging points for electric vehicles (EVs) across the nation, supporting 1.1 million such vehicles
China’s nickel-cobalt-manganese (NCM) battery output in June registered fell to 20.5 gigawatts hours (GWh), down by 1.5 GWh, or 6.8%, from the 22 GWh in May, and down by 3.7 GWh, or 15.3%, from the 24.2 GWh in March, according to the data from China Automotive Battery Innovation Alliance (CABIA)
The imminent production of commercial-scale battery-grade lithium hydroxide in the US by American Battery Technology Co (ABTC) will help domestic cathode makers to improve their inventory management by shortening lead times, according to the company’s top executive.
Germany-based Volkswagen Group’s battery company PowerCo and California-based QuantumScape have entered into an agreement to industrialize QuantumScape’s solid-state lithium-metal battery technology, the companies announced on Thursday July 11