S Korean black mass payables hold firm in January, EU market weakens further

Payables in concluded deals for nickel cobalt manganese (NCM) black mass in the CIF South Korea market held largely firm in January 2024 despite weaker battery raw materials prices and lower bids from some buyers, according to market sources

Most deals for material included in Fastmarkets’ methodology specification were heard for NCM black mass over the month at payables of 70-72% CIF South Korea for nickel and cobalt including the value of lithium, which worked out at around 68-70% CIF without the value of lithium, sources said.

Bids were heard during the month largely between 60-70% CIF South Korea for nickel and cobalt including the value of lithium depending on buyer, seller and the quality of material. Recycler margins remained depressed over the month due to weak sales prices for materials such as cobalt and lithium.

Offers held firm at 71-73% CIF Korea for nickel and cobalt including the value of lithium from origins such as the US and Europe.

Although payables remained largely stable in the South Korean import market over the past month, the value of black mass continued to drop because of weaker underlying metals prices.

Fastmarkets’ daily price for black mass, NCM/NCA, inferred, cif South Korea averaged $4216.82 per tonne in January, down by $71.91 per tonne from $4288.73 per tonne in December.

The inferred prices are calculated based on the midpoint of the black mass payables for each market together with the corresponding underlying metal prices using midpoint content levels in the black mass of 20% nickel, 10% cobalt and 4% lithium.

“Overseas suppliers were reluctant to lower their NCM black mass offers to anywhere below payables of 70% [CIF South Korea for nickel and cobalt, including value of lithium]. But we need to buy some extra volume for our production in the second quarter of 2024,” a major buyer source in South Korea said in January.

“Demand for raw materials remained low, so the trading of black mass in the past week has been limited. We are only operating at 50% capacity due to thin margins,” a second Korean buying source told Fastmarkets.

“You can see what’s happening in the primary nickel, cobalt and lithium markets – everything is oversupplied. And black mass is no different. We’re therefore seeing a massive slowdown in activity,” a European trading source said during the month.

Lithium cobalt oxide (LCO) black mass was heard sold at around 68% CIF Korea earlier in the month for payables of cobalt including the value of lithium.

But offers for the material were heard at as low as 64% CIF for cobalt including the value of lithium with bids at 62% CIF by the end of the month.

In the Southeast Asia market, NCM black mass was heard sold at payables of around 65-70% CIF for nickel and cobalt including value of lithium, while LCO black mass was heard sold to the same market at 63% CIF for cobalt including the value of lithium.

The value of lithium being paid in black mass in the CIF Korea and Asian markets continued to drop in January. Trading sources said the value of lithium was “almost non-existent” amid poor demand for lithium carbonate in key Asian markets.

Payables for lithium held flat at 3-5% CIF Korea in January, sources said.

Europe domestic market

Payables in the European local market fell further in January amid limited offtake from buyers and continued difficulties in exporting materials.

Most black mass-makers in Europe are designated as producers of hazardous waste. In order to export these materials, counterparties must follow a notification procedure under Basel Convention rules.

“Europe is a buyers’ market for black mass, while Asia is still relatively hungry for units. Asian capacity still has to be serviced,” a recycling source told Fastmarkets during the month, adding that this meant local buyers in Europe were in a position to push down payables.

“Payables dropped significantly in Europe in the new year. Let’s see how that evolves in the coming weeks,” an EU black mass consumer source said, adding that the main reason for this decline was “mainly an oversupply of black mass.”

Deals for NCM black mass within Fastmarkets’ methodology specification were heard in the EU domestic market during the month at payables of 47-53% EXW for nickel and cobalt, according to market participants.

The price for black mass, NCM/NCA, inferred, exw Europe averaged $3030.38 per tonne in January 2024, down 13% month on month.

Get full access to all the weekly black mass prices

To subscribe to the full suite of Fastmarkets’ weekly and daily black mass pricing as well as regular news and market reports, contact our sales team to discuss the right option for you.

View Fastmarkets’ non-ferrous metals methodology here.

What to read next
Manganese, chrome, tungsten and vanadium will be key topics of discussion at Fastmarkets' upcoming Asia Ferroalloys Conference 2024 in Hong Kong on February 26-28, after appearing on China's latest list of critical minerals
India’s burgeoning electric vehicle (EV) battery-making industry could mean the country becomes a significant importer and a reduced exporter of black mass in the coming years, Rajat Verma, founder and chief executive officer of Indian battery recycler Lohum, told Fastmarkets in an interview
Payables for black mass in key Asian markets showed potential for more downside in the week ended Wednesday January 31, according to market sources
The rise in capacity-building in the past years in both China and Indonesia quickly turned nickel market once in short-supply into an oversupplied one, not only in China, but also globally
Payables for black mass (shredded and sorted lithium-ion batteries) in the European domestic market continued to drop in the week to January 15 amid weak demand and abundant supply
Major carmaker Mercedes-Benz has deepened its plans to expand operations in Europe’s lithium-ion battery recycling space with the order of a new hydrometallurgical plant to recover battery metals from black mass