Proposal to launch US black mass payable indicators

Fastmarkets’ proposal follows initial feedback that market participants demand a transparent and reliable price reference in the United States market for black mass, which refers to the remains of lithium-ion battery packs after shredding, sorting and some processing.

The proposed payables would build on Fastmarkets’ existing payable indicators for black mass in the EXW Europe market, as well as first-of-their kind assessments for the CIF South Korea and Southeast Asia markets, all of which were launched in 2023. 

Fastmarkets’ proposed assessment indicators for US black mass would take into account prices for black mass of both end of life (EOL) and production scrap origins.

In 2023, the US accounted for 7% of all scrap lithium-ion batteries across the globe, according to Fastmarkets research estimates, but volumes are forecast by Fastmarkets research to rise sharply to 17% by 2034.

Growing local capacity
Many US producers of black mass sell their materials on an ex-works basis to either domestic consumers, traders or foreign consumers, according to market sources.

The United States is currently a net exporter of black mass due to insufficient domestic capacity to consume the material, sources say, with most of the volume currently exported to Asian markets such as South Korea and Southeast Asia.

In the coming years, domestic capacity in the US to consume the material is projected to rise sharply, with major investments from firms such as Ascend Elements, Redwood Materials and Nth Cycle. 

While spot market trading for black mass materials is more prevalent and more mature in Asian markets than it is currently in both Europe and North America, Fastmarkets subscribers have requested more information and payables information for North American markets with increasing frequency.

Payables for nickel and cobalt
Fastmarkets’ US black mass assessment indicators will assess payables for black mass produced from nickel cobalt manganese (NCM) and nickel cobalt aluminium (NCA) batteries. NCM black mass is the chemistry that is most prevalent in the United States spot market, according to market sources.

NCM and NCA black mass are usually priced with payables according to the value of its nickel and cobalt content, with these components comprising the largest non-graphite material share and being high in value. Both nickel and cobalt are vital for producing electric vehicle (EV) batteries and have become extremely strategic markets in recent years.

A specific lithium payable is not currently proposed to be included in these price assessments, with the value of lithium most often still built into the payables given for nickel and cobalt in the United States black mass market. Fastmarkets will also collect feedback on this point during the consultation period.

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 an EXW US basis. This decision was made to capture as much spot market liquidity as possible, with a still maturing domestic market, but may be adjusted in the future depending on market participant feedback and trading volumes captured in Fastmarkets’ assessments.

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

Black mass, NCM/NCA, payable indicator, nickel, domestic, exw USA, % payable LME Nickel cash official price
Quality: Nickel and cobalt-rich black mass composed with metal content of 15-25% nickel, 3-13% cobalt, max 2% aluminium, max 2% copper, max 5% fluorine
Quantity: min 1 tonnes
Location: Ex Works United States
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 18-38% min/max.

Black mass, NCM/NCA, payable indicator, cobalt, domestic, exw USA, % payable Fastmarkets’ standard-grade cobalt price (low-end)
Quality: Nickel and cobalt-rich black mass composed with metal content of 15-25% nickel, 3-13% cobalt, max 2% aluminium, max 2% copper, max 5% fluorine
Quantity: min 1 tonnes
Location: Ex Works United States
Unit: % payable of Fastmarkets’ standard-grade cobalt price in whs Rotterdam (low-end)
Payment terms: Letter of credit, current price month
Timing: 45 days
Publication: Weekly
Notes: Total cobalt and nickel content to be 18-38% min/max.

These prices will be a part of Fastmarkets Scrap Physical Price package.

The consultation period for this proposal will start on Monday June 24 and will end on Wednesday July 24, with an update to this proposal published on that day.

In conducting a one-month consultation period, Fastmarkets wishes to take a collaborative approach with the US battery recycling industry to ensure the correct specifications for the market ahead of launch.

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 Kirstyn Petras by email at: pricing@fastmarkets.com. Please add the subject heading: “FAO: Kirstyn Petras re: US black mass payable indicators.”

Please indicate if comments are confidential. Fastmarkets will consider all comments received and will make comments not marked as confidential available upon request.

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