Black mass market sentiment turns negative in July amid weaker battery metals prices

Although recent capacity increases in Korea kept demand relatively high, payables took a hit in the second half of the month in response to weaker battery metals prices, sources told Fastmarkets.

Further declines in nickel, cobalt and lithium prices in July led to reduced payables for black mass in China and Southeast Asia, providing Korean recyclers with less competition when trying to secure their feedstock, according to market sources.

Asia

At the start of July, spot deals for US- and Europe-origin nickel-cobalt-manganese (NCM) black mass of low impurity were heard concluded at payables of 75-77% CIF South Korea for nickel and cobalt, value of lithium included.

But by the end of the month, key buyers were willing to pay no higher than 70-73% CIF South Korea on the same basis, while other buyers were inclined to pay even less.

“Because nickel prices dropped suddenly, some suppliers disappeared from the market or increased their payables [to compensate], but buyers don’t want higher payables,” a South Korean trading source told Fastmarkets in late July.

Payables offered by suppliers in North America and Europe were around 75-77% CIF Korea for nickel and cobalt – including the value of lithium – by the end of July, compared with offers at the beginning of the month at 75-80% CIF.

A Chinese trading source said they had always been bearish on black mass payables for the second half of 2024 due to expectations of weaker metals prices. But the source added that recent impositions of import tariffs on Chinese EVs in the West have been particularly damaging for lithium prices recently.

“Southeast Asia doesn’t want to buy black mass because lithium carbonate prices keep going down each day. The EV tariffs are also affecting the market further and will affect the worldwide black mass market for the rest of the year,” the source said.

Fastmarkets’ assessments of the black mass, NCM/NCA, payable indicator, nickel, cif South Korea, % payable LME nickel cash official price and of the black mass, NCM/NCA, payable indicator, cobalt, cif South Korea, % payable Fastmarkets’ standard-grade cobalt price (low-end) both averaged 71.7% in July, compared with 72% in June.

Fastmarkets’ assessment of the 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 averaged 4% in July, unchanged from June.

Fastmarkets’ daily price assessment for black mass, NCM/NCA, inferred, cif South Korea averaged $4,252.63 in July, down from $4,454.34 per tonne in June.

The inferred price uses the midpoint of Fastmarkets’ black mass payables, the midpoint of metal contents in the black mass covered in the specification, and underlying metal prices.

Europe

European black mass payables also eased down in July following the pullback in demand from Asia.

Transactions for lithium cobalt oxide (LCO) black mass in Northern Europe were heard at payables of 50% ex-works for cobalt in late July, down from 55% ex-works in June.

Bids for NCM black mass were heard at payables of 50-55% ex-works for nickel and cobalt during the month, while offers were heard at 60% ex-works and above.

EU market participants said during July that lower buying from Asia, coupled with a higher supply of the material, pushed down payables for black mass and reduced input battery costs as well.

In a sign of the difficult operating environment for European battery recyclers, major chemical company BASF announced in late July that it had paused its plans to build a large refinery for battery recycling in Spain, citing sluggish adoption of EVs and cell capacity in the EU.

Fastmarkets’ assessments of the 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) both averaged 57.5% in July, inching down from 57.75% in June.

Fastmarkets’ daily price assessment for black mass, NCM/NCA, inferred, exw Europe averaged $3,333.60 per tonne in July, down from $3,481.63 per tonne in June.

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