Payables for NCM black mass in South Korea pick up in March

Payables for nickel cobalt manganese (NCM) black mass in the CIF South Korea market picked up in March amid stronger demand and improving battery raw materials prices

However, Fastmarkets has learned that the European market has remained a buyer’s market due to oversupply.

South Korea

Trading of nickel cobalt manganese (NCM) black mass was subdued early in the month. Most South Korean recyclers were suffering from thin margins due to continued weakness in battery raw material prices.

Fastmarkets heard that recyclers across South Korea were operating at reduced capacity due to weak downstream lithium demand, which has led to limited demand for black mass.

“We are operating at 70% capacity at our facility, and I believe that across [South] Korea that would be regarded as high. Almost no recycler can operate at full capacity at the moment in [South] Korea due to the low margins,” a South Korean recycler source told Fastmarkets.

But sentiment started to improve in the second half of March due to increases in nickel and lithium prices, leading suppliers to target higher payables.

Lithium prices in China’s domestic market improved over the past month amid a strong performance in the futures market. Nickel and nickel mixed hydroxide precipitate (MHP) also showed upward momentum in the past few weeks, raising the value of black mass and providing some recyclers with stronger margins when converting black mass to MHP.

Market participants were reporting stronger demand for black mass from both Chinese and South Korean buyers.

“The number of offers [for black mass] was shrinking over the past week,” a second recycler source in South Korea said. “We heard that inquiries from Chinese black mass buyers increased this week following higher lithium prices, which also sent positive signals to sellers.”

A major South Korean recycler’s new hydrometallurgical post-treatment plant will also start operations in April, with the capacity to process 1,000 tonnes of black mass per month, Fastmarkets heard.

“The recycler was actively seeking materials to prepare for the opening of its new plant,” a consumer source in South Korea said.

Offers of NCM black mass have risen to 75-80% CIF South Korea for nickel and cobalt at the end of March, including the value of lithium, compared with 70-75% CIF in February.

Cobalt and nickel payables for NCM materials were heard traded at 70-72% CIF South Korea including the value of lithium in March. This worked out to 68-70% CIF without the value of lithium, according to sources, and compares with 65-67% CIF the previous month.

Buying ideas among South Korean buyers were mostly at 65-70% CIF in early March including the lithium value, but recyclers had to raise their bids to higher than 70% CIF to secure any material with decent specifications, sources told Fastmarkets.

The month-to-date Fastmarkets’ daily price for black mass, NCM/NCA, inferred, cif South Korea was $4,271.08 per tonne in March. This compared with the average value in February of $4,110.93 per tonne.

The average Fastmarkets payables assessments for black mass, NCM/NCA, payable indicator, nickel, cif South Korea, % payable LME nickel cash official price and black mass, NCM/NCA, payable indicator, cobalt, cif South Korea, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both were both 67.19% for March, compared with 66% in February.

The average Fastmarkets payable 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 unchanged month on month at 4% in March.

Payables for high-cobalt lithium cobalt oxide (LCO) black mass also followed the uptrend. A deal for India-origin LCO black mass was heard concluded at 67% CIF South Korea for cobalt in the week beginning March 25, with the value of lithium included, while similar material was traded at 63.5% CIF in February.

Europe

Improved sentiment in Asia has only partially translated to Europe, where an oversupply of black mass means it is still very much a buyer’s market.

Recent deals were heard done at payables of around 47% EXW Europe for nickel and cobalt in NCM black mass by one trading firm that sells to the local and export markets.

Deals were heard done to the domestic market by a Northern European seller source at payables of 48-52% EXW Europe for nickel and cobalt in NCM black mass, Fastmarkets heard.

Difficulties and long lead times going through Basel Convention rules to ship black mass categorized as “hazardous waste” costs sellers time and cashflow when exporting, meaning some of them opt to sell to the local market.

Despite this, a lack of local consumers means that material still tends to be exported, with sales often taking place to Asia or North America.

The average Fastmarkets payables assessments for black mass, NCM/NCA, payable indicator, nickel, domestic, exw Europe, % payable LME Nickel cash official price and of the black mass, NCM/NCA, payable indicator, cobalt, domestic, exw Europe, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both 49% for March, compared with 50% in February.

The month-to-date Fastmarkets’ daily price for black mass, NCM/NCA, inferred, exw Europe, was $3,068.46 per tonne in March, compared with the average value in February of $3008.20 per tonne.

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