Proposal to launch Asian black mass payable indicators: pricing notice

Fastmarkets’ proposal follows initial feedback that market participants demand a price reference for black mass, referring to the remains of a battery pack after shredding and processing.

South Korea is one of the major importing nations of end-of-life (EOL) electric vehicle (EV) black mass, as well as a significant importer of EOL scrap batteries for processing into black mass within its growing domestic market.

Spot market trading for EOL EV black mass materials is more prevalent and more mature in Asian markets than it is currently in both Europe and North America, according to market participants. In China, while there is a large domestic black mass market, importing these materials is officially prohibited.

Fastmarkets’ South Korean black mass payable indicators will assess the payables for EOL EV black mass produced from nickel, manganese cobalt (NMC) and nickel cobalt aluminium (NCA) batteries. NMC black mass is the chemistry which is most prevalent in the South Korean spot market, according to market sources.

NMC and NCA black mass is usually priced according to the value of their nickel and cobalt content, with these components comprising the largest non-graphite material share and being high in value. Both nickel and cobalt are materials vital for making EV batteries and have become extremely strategic markets in recent years.

A specific lithium payable is not included for now in these price assessments, but Fastmarkets understands that the value of lithium is often built into the payables given for nickel and cobalt in the Asian black mass markets.

The value of the nickel content in black mass is typically priced as a payable to the London Metal Exchange official nickel cash price while the value of cobalt content is typically priced to the low end of the Fastmarkets cobalt standard grade, in-whs Rotterdam price.

This price is proposed to be assessed on a delivered South Korea basis, and will include material which has both been generated within the east Asian country, as well as material which has been imported and delivered to a consumer within the country. This decision was made to capture as much spot market liquidity as possible, but may be adjusted in the future depending on market participant feedback and trading volumes captured in Fastmarkets’ assessments.

Price points gathered for other major Asian markets will be normalized to a delivered South Korea basis using data from active market participants in contact with Fastmarkets.

Based on market participant demand and interest, Fastmarkets’ black mass price assessments may be rolled out into other markets in the future.

The proposed specifications for the new South Korean black mass payable indicators are as below:

Assessment: EV black mass payable indicator, nickel, delivered South Korea, % payable of LME Nickel
Quality: End-of-life electric vehicle black mass composed of NMC and NCA batteries with metal content of 15-25% nickel, 5-15% cobalt, 3% lithium, max 6% aluminium, max 2% copper
Quantity: min 1 tonnes
Location: Delivered to consumer, South Korea. Other major Asian markets to be normalized.
Unit: % payable of LME nickel cash price
Payment terms: Letter of credit, current price month
Timing: 45 days
Publication: Weekly
Notes: Total cobalt and nickel content to be 20-40% min/max. Material must be dried and free-flowing.

Assessment: EV black mass payable indicator, cobalt, delivered South Korea, % payable of Fastmarkets’ standard-grade cobalt low end
Quality: End of life electric vehicle black mass composed of NMC and NCA batteries with metal content of 15-25% nickel, 5-15% cobalt, 3% lithium, max 6% aluminium, max 2% copper
Quantity: min 1 tonnes
Location: Delivered to consumer, South Korea. Other major Asian markets to be normalized.
Unit: % payable of Fastmarkets’ standard-grade cobalt price (low end, $/lb)
Payment terms: Letter of credit, current price month
Timing: 45 days
Publication: Weekly
Notes: Total cobalt and nickel content to be 20-40% min/max. Material must be dried and free-flowing.

The consultation period for this proposed price will end 30 days from the date of this pricing notice, on May 5, with an update to this proposal published on that day. Subject to market feedback, the proposed changes would take place beginning with the weekly assessment on May 15, 2023.

To provide feedback on this proposal, or if you would like to provide price information by becoming a data submitter to this assessment, 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.