Launch of South Korean NCA/NCM black mass lithium payable assessment

This comes in response to demand from the market for greater transparency about the value of lithium in black mass traded in the Korea market.

Weekly assessments of nickel cobalt manganese (NCM) and nickel cobalt aluminium (NCA) black mass payable indicators for nickel and cobalt, cif South Korea, were launched on May 17.

The lithium payable, which is also based on net payables for NCM and NCA black mass in the cif South Korea market, will sit alongside the existing nickel and cobalt payables and will provide the market with greater clarity on the value placed on the lithium component in black mass.

The traditional method of pricing NCM black mass has been to provide payables for nickel and cobalt including the value of lithium, which has been the market activity captured by Fastmarkets’ pricing methodologies so far.

But because of higher lithium prices through May and most of June 2023, payables for black mass have trended upward, together with a greater prevalence of separate payables for lithium being demanded by sellers.

Despite most South Korean buyers still resisting paying outright lithium payables, consumers do accept that the market is ultimately headed for bespoke lithium payables, particularly in the case of lithium prices rising again to levels last seen at the start of 2023. Some consumers are also supportive of greater clarity on the lithium value in black mass.

Due to the launch of an NCM black mass lithium payable, there will be a one-time, non-market adjustment downward carried out on both the nickel and cobalt payable indicators on August 16; a separate notice breaking down the realignment will be published after the market settles. This is because the method of pricing the black mass will move away from including the value of lithium in the nickel and cobalt payables.

The launch of this price assessment follows a one-month consultation period that began on July 13 and expired on August 14.

The price specifications are as follows:
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
Quality: Nickel- and cobalt-rich black mass composed with metal content of 15-25% nickel, 5-15% cobalt, 3-5% lithium, max 6% aluminium, max 2% copper. Minimum total cobalt and nickel content of 20%.
Quantity: Min one container load
Location: Cost insurance and freight (CIF) main ports, South Korea. Data points for South Korean domestic trade may be normalized based on information provided by market participants.
Timing: 45 days
Unit: % payable of Fastmarkets’ lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea, $ per kg
Payment terms: Letter of credit
Publication: Weekly, Wednesdays 6-7pm Singapore time
Notes: Material must be dried and free-flowing.

Black mass refers to the remains of a battery pack after it is shredded and processed. Depending on the type of battery being treated, it may contain volumes of nickel, cobalt and lithium, which can be recovered by processors. South Korea is one of the major markets involved in buying, trading and consuming black mass.

To provide feedback on these prices, or if you would like to provide price information by becoming a data submitter to these assessments, please contact Lee Allen by email at: pricing@fastmarkets.com. Please add the subject heading: “FAO: Lee Allen re: Asia black mass payable indicators.”

To see all Fastmarkets’ pricing methodology and specification documents, go to https://www.fastmarkets.com/about-us/methodology.