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Payables for nickel cobalt manganese (NCM) black mass in the CIF Asia markets were firm in May despite volatility in battery raw material prices.
Strong demand in Asia continued to weigh on supply of in-specification, low-impurity black mass in Europe and North America, leading payables to rise in both regions over May.
Major Asian buyers were concerned about the supply of high-quality NCM black mass to feed their units, providing support to payables for dried material with low impurity levels, Fastmarkets learned.
“In-specification black mass can help us save costs when processing. We run more efficiently with good-quality materials,” a South Korean consumer source told Fastmarkets during the month. “We are generally looking for materials with less than 2% copper and less than 1-2% aluminium, but it is not easy to find such material.”
As a result, Fastmarkets heard of a greater tendency for some Asian import buyers to want to secure more supply of black mass on contracts lasting several months, rather than buying purely on spot.
“Some buyers [in South Korea] are getting tired of sourcing material, so they are asking for contracts of one year or less. More suppliers [in Europe] also want to give material to use or ask us to give a quotation for it,” a South Korean trading source said.
Said a Chinese trading source: “Customers want to get six-month contracts and will pay higher payables to secure this.”
For example, in early May, the Chinese trader believed customers would accept as high as 77% CIF Southeast Asia for payables of nickel and cobalt including the value of lithium for NCM black mass on a three-month contract, while they would not pay above 75-76% CIF on spot – even after negotiations.
Fastmarkets’ methodology for CIF South Korea and Southeast Asia NCM black mass is pegged at metal contents of 15-25% nickel, 5-15% cobalt and 3-5% lithium, with maximum 2% copper and 2% aluminium content. The specification also stipulates that the material must be dry and free-flowing.
Stronger battery raw material prices in the second half of May also boosted market sentiment for high-nickel NCM black mass.
The London Metal Exchange official nickel cash price returned above the key $20,000-per-tonne mark on Wednesday May 29 after an early-week drop, while Fastmarkets’ price assessment for cobalt standard grade low end in whs Rotterdam inched back up to early-May levels on May 24 after several tough weeks.
Over the past month, NCM black mass from India, Japan and Europe was heard sold at 70-75% CIF South Korea for nickel and cobalt including the value of lithium, sources said.
Domestic NCM black mass with less than 2% copper and aluminium content was also concluded this month for payables of 72-75% for nickel and cobalt including the value of lithium delivered South Korea, Fastmarkets heard.
Offers of NCM black mass from the US, Europe and India were heard at 75-80% CIF South Korea including the value of lithium, according to sources.
Fastmarkets’ South Korean black mass payable assessments calculate lithium separately from its nickel and cobalt payables, in line with demand from the market.
The average Fastmarkets payables assessments for black mass, NCM/NCA, payable indicator, nickel, cif South Korea, % payable LME nickel cash official price and for black mass, NCM/NCA, payable indicator, cobalt, cif South Korea, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both 71% for May compared with 70.38% in April.
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 in May at 4%.
Fastmarkets’ daily price for black mass, NCM/NCA, inferred, cif South Korea averaged $4,721.86 per tonne in May. This compared with an average value in April of $4,583.27 per tonne.
For high-grade black powder with lithium content of 6-7%, some market participants estimated that the prevailing market level was at 80-85% CIF South Korea for nickel and cobalt including value of lithium over the past month, while some trading sources reported black powder deals at just above 90% CIF South Korea.
Black mass payables in Europe increased in May. Competition for exporting material from Europe to Asia and North America has been the main reason supporting payables in the European ex-works market of late, according to market sources.
In early May, deals for Europe-origin NCM black mass in the Europe ex-works market were heard at payables of 53-58% ex-works for nickel and cobalt.
At the end of the month, European black mass with 20% nickel and less than 2% copper and aluminium was judged workable from both sell- and buy-side sources at 55-60% ex-works Germany for nickel and cobalt in NCM black mass.
A European seller source said during the week to May 30 that materials categorized as hazardous waste could not fetch higher than 58% ex-works due to cumbersome processes exporting the material. A second European producer source said the workable level for product-status black mass would be around 55-60% ex-works Europe for nickel and cobalt in NCM.
The average Fastmarkets payables assessments for black mass, NCM/NCA, payable indicator, nickel, domestic, exw Europe, % payable LME nickel cash official price and for the black mass, NCM/NCA, payable indicator, cobalt, domestic, exw Europe, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both 55.80% for May, up from 52.88% in April.
Fastmarkets’ daily price for black mass, NCM/NCA, inferred, exw Europe averaged $3,610.54 per tonne in May. This compared with an average value in April of $3,348.54 per tonne.
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