The incident has caused a major blockage for ships traveling the Moselle to reach the Rhine – a vital artery for the shipment of metals such as aluminium and steel in Germany and Europe. Around 70 ships have been stuck along the Moselle on the way to the Rhine, Fastmarkets understands.

Repair works could last until March 2025, seriously disrupting the trade flows of steel and metal raw materials in Germany and across Europe, according to market participants.

Sources expect the disruption to raise freight costs for alternative transport methods and therefore prices for some raw materials, such as ferrous scrap, in the affected areas.

“In addition to the technical challenges of restoring the lock’s functionality as quickly as possible, the ships [are] stuck above Müden on the Moselle and Saar…Long periods of downtime for freight and passenger shipping represent an enormous economic burden,” the German Waterways and Shipping Authority (WSA) federal agency said on Monday.

“The WSA is therefore urgently looking for a solution to lock the ‘trapped’ ships into the Müden downstream area so that they can leave the Moselle in the direction of the Rhine and carry out other transports there,” the WSA said.

Impact on prices

The Moselle is one of the most vital transport routes for shipping in Germany and Europe. So far in 2024, around 8.1 million tonnes of goods have been transported through the Müden lock, according to the WSA.

The majority of the transported goods are ores, steel raw materials, mineral products and fuels upstream, as well as agricultural and forestry products, and downstream iron and steel products.

Although most market participants said it was too early to define how the disruption could affect metals prices, steel market sources said they believed that freight prices will likely jump for alternative routes and transport solutions, and as a result prices for raw materials might move higher.

The main alternative methods to ship scrap metal would be via truck and rail, according to market sources. But if freight must be transferred to the road, around 80 truckloads of scrap would be needed to replace one barge of the steelmaking raw material, according to a German steel trader.

A Turkish scrap trader also said that the river accident was a reason why Turkish import scrap prices rebounded late on Tuesday on new deals from Europe and the US, after hitting their lowest levels since June 2022 earlier this week.

“The accident caused the downturn in the scrap markets to stop. This was also one of the factors that prevented [Turkish scrap import] prices from falling further. I believe it will affect the scrap industry throughout Europe,” a Turkish trading source said on Wednesday.

Fastmarkets calculated the index for steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey at $339.45 per tonne on Wednesday, up by $14.45 per tonne day on day.

Steel industry assesses the damage

Saarstahl and Dillinger, German steel companies based in Saarland, are both affected by the incident, Fastmarkets heard.

“Like other companies, the Saarland steel industry is also affected by the closure. We will quantify the extent over the next few days and use alternative transport solutions such as rail and lorries. Both incoming and outgoing goods are affected. We are working with all parties involved to find a quick solution,” the spokesperson of SHS Stahl-Holding Saar, a major shareholder in Dillinger and Saarstahl, told Fastmarkets on Wednesday.

Sources familiar with the matter also said that both raw materials supply and shipping of finished steel products might be affected, especially if repair works last for an extended period.

“For example, Dillinger also produces large steel heavy plates that can only be shipped by river – shipping those by truck or railway is not possible,” a buyer in Germany said.

Saarstahl runs three steel plants in Germany, in Voelklingen – where the company has a 2.6 million tpy basic oxygen furnace (BOF) and can produce sections and semi-finished products – in Neunkirchen, and in Burbach.

In Neunkirchen, the company produces 600,000 tpy of wire rod and 550,000 tpy of merchant bar, while in Burbach the company operates a 1.2-million tpy capacity wire rod mill, according to Fastmarkets data.

Dillinger has capacity to produce 2.7 million tpy of crude steel at its plant in Dillingen via BOF, while also running a plate mill with an annual capacity of 1.7 million tpy of hot-rolled plate.

ArcelorMittal

A source at major steelmaker ArcelorMittal based in Luxembourg downplayed the impact of the incident on the company’s raw material supply.

The company sources most of its scrap via road and rail, and the duration of the repairs would be less than many feared, the source said.

“There will be no impact [on ArcelorMittal]. The lock will be repaired in a few weeks; scrap suppliers are creating hype to put some life into a dead market,” the source said.

“Seventy vessels are stuck, it’s true, but the repair process will be much faster…I expect it to be complete by January 15,” the source added.

On the impact on the steelmaker’s scrap supply, the source was confident there would be no disruption.

“We have more than enough inventory. We get 0-10% of our scrap from this route, and that is the expensive flow so we are happy not to get anything via this route. We are landlocked; the port is far away, so it’s not really significant,” the source said.

This position was echoed by the official comment from an ArcelorMittal spokesperson.

“The incident that occurred at one of the locks on the Moselle river in Germany should have a limited impact on ArcelorMittal’s activities in Luxembourg,” the statement, received by Fastmarkets on December 11, reads. “To date, only 10% of scrap supplies to ArcelorMittal’s electric furnaces in Luxembourg and 10% of shipments pass through the port of Mertert [the port on Moselle river through which raw materials and finished products transit for the ArcelorMittal sites in Luxembourg].”

ArcelorMittal’s logistics teams are currently working on alternative solutions, both in the short and medium term, to offset this disruption to incoming and outgoing flows, the spokesperson said.

“These solutions could involve receiving scrap volumes via the port of Koblenz and then transporting them by road and/or rail to the Group’s Luxembourg sites. For shipments, one solution would be to send sections and sheet piling by rail to the port of Antwerp. These solutions will be explored in the coming hours and days to define the most efficient logistical circuit possible,” spokesperson added.

ArcelorMittal runs two electric-arc furnace (EAF)-based mills in Luxembourg.

ArcelorMittal Differdange has an EAF with projected capacity for 1.4 million tpy of crude steel and a 1.2 million tpy sections mill, according to Fastmarkets data.

ArcelorMittal Belval runs a 950,000 tpy EAF and a 1.4 million tpy sections mill.

Impact on supply routes and transport costs

A major European scrap processor agreed that the effect on ArcelorMittal would be minimal, but said the effect on other mills could potentially be more significant, well as on scrap sellers through increased transport costs.

The processor said it had heard of steelmakers already rerouting scrap supplies from Italian steelworks to operations in Germany that were affected.

A second major European scrap processor agreed that several trucks would be required to cover the volumes shipped in one barge, saying that each barge would typically take 1,500-2,000 tonnes of ferrous scrap, but said he didn’t believe there would be any problem in sourcing more trucks despite the consequent higher demand level.

Only a third of scrap is typically transported by water in the western European market, he said, while the other two thirds are fulfilled by rail and truck.

The major disruption comes at an already challenging time for European scrap processors with EU scrap supply already under severe pressure throughout 2024.

This is due to slower economic activity and higher inflation rates both hurting scrap generation from manufacturing output and reducing the volume of goods being scrapped, according to market participants, while higher energy and labor costs in recent years have also hampered economic health in Europe.

Cem Turken in Mugla contributed to this story.

The post European steel companies scramble for alternative transport after Moselle river accident appeared first on Fastmarkets.

For example, Fastmarkets’ daily price assessment for lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea averaged $10.56-11.33 per kg in the month of November 2024 to date, down sharply from $19.91-21.32 per kg one year before.

“The market is in a dip, and my question is when it will rebound. [It] will take off, but not so soon as we would have liked,” Nils Steinbrecher, managing director of Korean-owned recycler SK tes EMEA, said.

“Margins have taken a hit, and the feedstock prices have not gone as low as the commodity prices,” Chetan Jain, senior vice president of business development at major Indian recycler Lohum, said.

In the wake of the economic difficulties, major recycling European market participants such as large minerals firm Eramet, chemicals giant BASF and major metals producer Umicore have either delayed or cancelled their expansions into battery recycling markets over recent months.

But there is significant growth in volumes of scrap batteries expected in the coming years, Fastmarkets research data shows.

While the total supply of battery scrap and end-of-life batteries in Europe is forecast at 96,000 tonnes in 2024, that is forecast to rise to 252,000 tonnes in five years’ time, according to Fastmarkets’ research team.

Learn more about the outlook for battery scrap in 2025 as well as other key segments of the battery materials market, including lithium, cobalt, nickel and graphite, when you watch our recent webinar. Simply fill in the form here to view the full global outlook for 2025.

Ecobat Solutions

One firm that has been busy opening lithium-ion battery recycling plants over the last year is major lead acid battery recycler Ecobat.

Its lithium battery shredding plant in Hettstedt, Germany, has been operational since 2023, and the company targets its shredding capacity will exceed 10,000 tonnes per year in the coming years, Tom Seward, EU key accounts director, Ecobat Solutions, said on Monday November 25.

Ecobat Solutions also set up a battery shredding pant in Arizona, US, as of 2023.

Ecobat’s UK lithium-ion battery pre-treatment plant in Darlaston, in the West Midlands, is currently being commissioned and will have a total planned input capacity exceeding 22,000 tonnes per year, according to Seward.

The company remains committed to producing black mass and not further refining the material, Seward said. The approach is consistent with plans laid out by former Ecobat Solutions vice president of global sales, Elliott Ethridge, in a Fastmarkets interview published in January 2024.

SungEel HiTech

South Korean recycling major SungEel HiTech was represented at the event by Soochul Park, managing director of SungEel Europe & Hungary.

Following the company’s recent expansion of hydrometallurgical capacity with the opening of its third hydro center in South Korea earlier this year, it is planning to further expand across Europe, Park said.

SungEel HiTech already operates pre-processing shredding plants for recycling lithium-ion batteries in Hungary and Poland, but the company is actively looking to expand into post-treatment refining capacity on the continent.

“The European Union will restrict black mass exports, so we will need to set up [hydrometallurgical capacity] in Europe,” he said.

SungEel could need as many as three hydrometallurgical post-treatment plants in Europe over the coming years, according to Park, with countries such as Hungary, Germany and France under consideration.

European Commission lawmakers have proposed a reclassification of black mass and lithium-ion battery scrap under waste codes, which is expected to halt exports of the materials from Europe to non-Organization for Economic Co-operation and Development (OECD) countries once implemented.

Although South Korea as an OECD member country can legally import hazardous waste black mass, the Basel notification process can be time-consuming and costly, according to market participants.

Most producers of black mass in Europe are categorized as makers of hazardous waste material. Difficulty and expense in moving the material means they generally attract lower payables than material classified as product-spec black mass.

Fastmarkets’ latest assessments of the black mass, NCM/NCA, payable indicator, nickel, domestic, exw Europe, % payable LME Nickel cash official price and the black mass, NCM/NCA, payable indicator, cobalt, domestic, exw Europe, % payable Fastmarkets’ standard-grade cobalt price (low-end) were 55-62% on Wednesday November 20, both unchanged since October 30.

Huayou Recycling

Chinese cobalt giant Huayou is another major company looking to make a splash with new western recycling capacity, Wei Zhang, managing director Europe and North America, Huayou Recycling, said on Tuesday November 26.

The company already has a major recycling operation in China with around 65,000 tonnes of input capacity for batteries, with capability to make 12,000 tonnes of nickel and cobalt sulfate, he said.

Huayou operates precursor cathode active materials (P-CAM) and CAM production in China and is building a CAM production site in Hungary.

It is also part of the joint venture which set up and operates the POSCO HY Clean Metal hydrometallurgical post-treatment plant in South Korea, which started commercial production in 2023.

But Huayou is also in discussions to set up hydrometallurgical post-treatment capacity for black mass in Europe, according to Zhang, with a decision on how the company will proceed expected by next year.

“The goal is not possible [currently] in Europe for a fully integrated system,” Zhang said, but he added that any upbuild in capacity would certainly require partnerships with local European companies.

“The recycling market still remains challenging, but there are opportunities,” he said. “If we do something here in Europe, we would like to be careful and serious.”

Huayou is also looking to set up black mass refining operations in the US, but timeframes on that were less clear, Zhang added.

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The post Lithium battery recyclers plan new Europe expansions despite tough market conditions appeared first on Fastmarkets.

Its expansion comes after investments into the company by SQM Lithium Ventures, the corporate venture arm of South American lithium producer Sociedad Quimica y Minera de Chile (SQM).

Post-treatment projects

One part of Altilium’s development is its building of post-treatment plants with input of battery scrap or black mass, in both the UK and Bulgaria.

Its Medet recycling hub in central-west Bulgaria is being developed as a “one-stop-shop for critical minerals in the European region, including copper, nickel, lithium and cobalt,” the firm said in May.

Altilium’s Medet hub will host a retrofit hydrometallurgical plant to recycle old electric vehicle (EV) batteries and production scrap from Eastern Europe, with capacity to process scrap from 24,000 EVs per year, the company said in May.

“We are completing final engineering work and [are] on track for commissioning next year,” a company spokesman told Fastmarkets on Thursday.

The Medet unit will also feature a copper tailings project to recycle copper from old mine waste.

“The vast site of the Medet tailings contains approximately 110 million tonnes of waste material,” Altilium said in June. “Altilium plans to recover copper and other minerals from the tailings, using its proprietary hydrometallurgical process, transforming what was once considered waste into a critical resource for Europe’s future battery industry.”

Altilium’s first mini-commercial plant is currently under construction in Plymouth, southwestern England, while its planned Teesside plant in northeastern England will be one of the largest EV battery recycling facilities in Europe once completed, the firm says.

The Teesside plant will have capacity to process scrap from more than 150,000 EVs per year, producing 30,000 tonnes per year of cathode active materials (CAM), enough to meet around 20% of the UK’s expected needs by 2030, according to Altilium.

Current operational refining capacity for black mass in Europe remains low, with many firms on the continent only operating pilot plants or demonstration post-treatment plants.

The vast majority of operational recycling capacity in Europe comes in the form of pre-treatment, shredding plants, with the newest example being the recent opening by South Korean-owned SK TES of its new Rotterdam facility to produce black mass.

Due to the lack of local processing, and several logistical and legal hurdles concerning the export of hazardous waste black mass from the EU through the Basel Convention framework, some black mass producers prefer to sell their material locally, at relatively low payables, to traders or agents based in Europe but representing foreign companies, according to market sources.

This situation allows European consumers to be able to obtain black mass at lower payables than are seen in the US market, which is not a signatory to the Basel Convention.

Fastmarkets’ latest assessments of its black mass, NCM/NCA, payable indicator, nickel, domestic, exw Europe, % payable LME Nickel cash official price, and of its black mass, NCM/NCA, payable indicator, cobalt, domestic, exw Europe, % payable Fastmarkets’ standard-grade cobalt price (low-end), were both 55-60% on October 9, unchanged week on week.

Fastmarkets’ corresponding assessments of the black mass, NCM/NCA, payable indicator, nickel, exw USA, % payable LME nickel cash official price, and the black mass, NCM/NCA, payable indicator, cobalt, domestic, exw USA, % payable Fastmarkets’ standard-grade cobalt price (low-end), were both 64-70% on Wednesday, narrowing upward from 63-70% a week earlier.

Agreements signed

In order to supercharge its end-to-end operational capability, Altilium agreed a new strategic partnership in June with recycling firm Enva for the collection and recycling of EV batteries in the UK.

The partnership will provide feed for Altilium’s Teesside refinery, a planned facility to refine lithium-ion battery scrap into battery-ready cathode anode material (CAM) for reuse in new battery production, the firm said.

Altilium in July also announced a new strategic relationship with Connected Energy, a developer of second-life battery energy storage systems.

Under the partnership, the two firms will collaborate to develop business models for the repurposing and recycling of EV batteries, bringing value to both companies, according to Altilium.

In September, Altilium received UK government funding for two of its projects with a total investment of £1.74 million ($2.27 million). This included the Teesside plant and a new partnership with an original equipment manufacturer (OEM) for the production and qualification of battery cells using CAM recovered from end-of-life batteries.

Also in September, Altilium announced that it has joined with major UK-based carmaker Jaguar-Land Rover to validate EV battery cells using recycled CAM.

“We are proud to lead this pioneering project with JLR that brings us one step closer to a circular economy for battery materials in the UK,” Dr Christian Marston, Altilium’s chief operating officer, said.

“By demonstrating that EV battery cells made from recovered materials can meet the rigorous standards of the automotive industry,” he added, “we’re not only reducing the environmental impact of battery production, but also supporting the UK’s efforts to build a more sustainable and resilient EV supply chain.”

Looking for more insights and intelligence to understand the future of the li-ion battery recycling market? Visit our dedicated lithium battery recycling hub today.

The post UK recycler Altilium expanding to provide ‘fully circular’ model for Li battery materials appeared first on Fastmarkets.

Led by China, the LFP chemistry is rapidly growing as a proportion of global electric vehicle (EV) battery production, which means that the volume of LFP battery scrap and black mass being produced in Europe is also rising sharply – albeit from a low base.

Fastmarkets’ research team estimates that around 26% of all black mass-produced globally will be of LFP chemistry in 2024, but this portion is forecast to rise to 32% by 2034.

Much of the LFP scrap arisings and black mass production currently made from this battery chemistry takes place in China. But European companies are increasingly searching for solutions and outlets for their LFP black mass.

European LFP recycling was a key issue raised by numerous delegates at the recent International Congress for Battery Recycling (ICBR) 2024 in Basel, Switzerland, held on September 10-12.

Economics in LFP recycling

At the heart of the issue around LFP black mass recycling is the fact that the process is less economically lucrative than that of nickel cobalt manganese (NCM) and lithium cobalt oxide (LCO) due to the lower value of their output materials, Korean black mass consumers have told Fastmarkets.

The main elements being recovered from LFP black mass are lithium and graphite, along with copper and aluminium. Lithium prices have fallen very sharply over the last year, while graphite is still not yet recycled on a commercial scale.

Fastmarkets’ price assessment for lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $9,800-11,300 per tonne on Monday September 23 ($1,390-1,602), with the price midpoint down by 59.4% year on year from $25,000-27,000 per tonne on September 20, 2023.

“The lack of nickel and cobalt kills the economics of recycling LFP batteries,” Luke Sweeney, senior battery recycling analyst at Fastmarkets, said.

“Modern battery cathode chemistries have less inferred value, be it in the form of LFP, lithium manganese iron phosphate battery (LMFP) or from the decreasing cobalt content in NCM cathodes. This poses a big long-term economic problem for battery recyclers as their battery feedstock is set to decrease in intrinsic value over the next ten years,” Sweeney added.

According to estimates by Fastmarkets’ research team, the intrinsic value of key metals in an average LCO battery are worth more than five times that of an LFP battery, while the average NCM cell is worth just under four times the value of an LFP battery, as shown in the chart.

Even for the higher-value and more popular NCM and LCO black mass chemistries, lower lithium prices and demand for recycled lithium salts have squeezed margins at black mass post-treatment facilities in Asia, thereby reducing consumer intake volumes and black mass payables.

Demand for LFP black mass is even lower across South Korea and Southeast Asia.

Incentive to take LFP scrap

European companies are currently paid to recycle LFP batteries, according to market sources, in a transaction known as a gate fee.

Gate fees depend on the state of batteries received, volumes and locations across the EU, but Fastmarkets has recently heard of fees around €3,000-4,000 ($3,349-4,465) per tonne of scrap LFP batteries being paid to recycle the batteries.

By comparison, recent gate fees for scrap NCM batteries have been heard around €0-400 per tonne depending on location and company. Some firms have been heard even paying for these materials given the rising capacity for black mass production in Europe.

While some major European black mass producers are already procuring LFP battery scrap, and producing LFP black mass, the question then becomes: what next?

One European producer told Fastmarkets on the ICBR sidelines in Basel that although some of their black mass is being sold effectively for free in the EU market, other volumes are being disposed. “We hope to be paid for this material in the future,” they said.

The cost of safe disposal of LFP is several hundred euros per tonne, a European trader said on the ICBR sidelines. The main objective in recycling LFP batteries currently is to ensure black mass producers can cover their costs, they added.

Challenges faced in recycling LFP black mass are not unique within the European industry treating hazardous waste materials.

“Available data indicates that more than half of the hazardous waste we generate in the EU is disposed of, and reuse and recycling account for 34%,” the European Court of Auditors said in a 2023 report.

“Some hazardous wastes streams are technically difficult to recycle on a large scale or in an economically viable way. When this is possible, recycling facilities encounter difficulties to decontaminate waste or to find market opportunities for the recycled outcome,” the report added.

Where are the outlets?

Once a producer or trader has LFP black mass in hand, the next issue then becomes who will buy the material.

European domestic capacity to consume black mass is nascent even for NCM and LCO materials. Interest in treating LFP black mass locally is slim to none. That means export is being explored by market participants.

China is by far the largest market for LFP black mass, but most of the LFP black mass produced in Europe today is categorized as hazardous waste, meaning that it cannot be legally exported to nations of outside of the Organization for Economic Co-operation and Development (OECD).

Furthermore, a Chinese trader source told Fastmarkets last week that although they are having more success in importing high-grade black mass and black powder of NCM chemistries into China amid a gradual relaxation of Chinese import rules, importing LFP black mass was still illegal.

In the Chinese domestic market, Fastmarkets has recently heard LFP black mass with lithium content over 3.8% priced at 2,600-2,700 yuan ($369-383) per 1% lithium, and LFP black mass with lithium content lower than 2.5% was heard at 2,300-2,500 yuan per 1% lithium.

By comparison, the value of the material is very low outside of China, according to sources.

South Korea is the largest OECD-member importer of black mass, but even companies in that country have a lack of interest in purchasing LFP black mass due to the recent drop in lithium prices making the process economically challenging.

A Chinese LFP consumer source told Fastmarkets last week that they were actively trying to purchase European LFP black mass for free, and could take the material on a CIF South Korea basis. It is not known if the material would be then consumed in South Korea or shipped into China from South Korea.

But some European producer companies have voiced concerns to Fastmarkets in recent months that although they will happily do business with South Korean companies for consumption in South Korea, they do not want to risk the possibility of their materials being trans-shipped outside of the OECD into China or Southeast Asia.

While most producers of black mass in Europe are classified as makers of hazardous waste, a smaller number of companies producing chemically similar materials have accreditation from their local authorities to say that the black mass they make is classified as a “product”, the latter of which can be shipped outside of the OECD and does not require certain waste-related documentation.

The European Commission is expected to iron out this imbalance and define all black mass as a hazardous waste material by the end of 2024, industry sources have told Fastmarkets.

The post European LFP recycling vital for future but facing economic barriers: LME Week appeared first on Fastmarkets.

The tide of Chinese steel is affecting a raft of major markets. Low prices from China have led to large export bookings to major scrap buying nations such as Turkey, as well as seriously reducing prices in Southeast Asia, where mills are also exporting large volumes of steel.

The consequences of this domino effect are being felt as far afield as the Russian and Middle Eastern steel markets, while also affecting demand for raw materials such as ferrous scrap.

Problems in China

Massive destocking and price drops have been unleashed in the Chinese long steel markets over recent weeks due to a revision of rebar manufacturing standards by China’s Standardized Administration in June, to come into effect on September 25.

Sellers need to clear their existing stocks of rebar before September 25 because rebar produced to the 2018 standard will not comply with the regulations for sales after that date.

Chinese domestic rebar prices dropped to a seven-year low on July 25. This led to bearish sentiment in the steel market, with the prices for hot-rolled coil and semi-finished steel following the dive downward.

Fastmarkets calculated its steel hot-rolled coil index, export, fob main port China, at $495 per tonne on August 1. This compared with $518 per tonne on July 1.

In the first six months of 2024, China’s exports of HRC and steel sheet amounted to 13.70 million tonnes, up by nearly 58% from 8.69 million tonnes in the corresponding period of 2023, according to Fastmarkets’ calculations based on Chinese customs data.

China also exported 1.09 million tonnes of hot-rolled bar and rebar in the January-June 2024 period, up year on year by 100,933 tonnes, 11%, from 989,067 tonnes.

Chinese mills have reduced their output of rebar due to a lack of orders recently, but they increased their production of billet.

“The higher supply of billet will put downward pressure on billet prices, and steel mills are seeking export orders because domestic demand isn’t strong enough,” an exporter based in China said.

Despite the rise in exports and poor local consumption, Chinese steel output fell by just 1.1% year on year in the first half of 2024, to 530.6 million tonnes. But production in June 2024 actually increased year on year by 0.2% to 91.6 million tonnes, according to the World Steel Association (Worldsteel).

Cheap billet floods Turkey

Concern about China’s influence on external steel markets has been mounting over recent months, but kicked into high gear in late July.

Fastmarkets heard that one Turkish steel mill purchased 45,000 tonnes of Chinese steel billet at $480 per tonne CFR Turkey on July 30, with a second mill in Turkey buying a 50,000-tonne cargo at $485 per tonne CFR.

Around 50,000 tonnes of Malaysian billet was also heard sold at $507 per tonne CFR Turkey in the second half of July.

Turkish steelmakers booked another 300,000 tonnes of billet from China at $500 per tonne CFR last week, in addition to at least 200,000 tonnes of imports from the same origin at $515 per tonne CFR in the previous weeks.

The growing competitiveness of steel billet against scrap can be seen when looking at Fastmarkets’ pricing histories. While Turkey is the largest importer of steel scrap in the world, its electric-arc furnace (EAF) operators are more than content to switch to rolling semi-finished steel when prices support that option.

But the mills have to export the same volume of finished long steel products to avoid the 22.4% import tax on billet imposed under the country’s inward-processing regime.

“Turkish steelmakers are buying this cheap Chinese billet under the inward-processing regime,” a trading source said. “These are really good prices, but I wonder how they will export [a similar] volume in such weak export markets. The Chinese billet will arrive in three months, and it is not certain that the export markets will be any stronger by then.”

Moreover, the cheap billet imports from China were also expected to put downward pressure on scrap prices soon, according to trade sources.

“The Turkish steel market has been very quiet recently. Cheap billet imports from China have made the situation worse. Scrap and rebar prices have not been affected much yet, but we may see the rock-bottom [of the market] if the mills stay away from the scrap markets for a couple of weeks,” a Turkish trading source said.

“Unfortunately, these Chinese billet sales have ruined the market,” a Turkish mill source said. “People stopped buying material. The Chinese material will arrive in three months. It seems that August and September will be worse. I see that traders are taking positions accordingly. Everybody is aware of the situation.”

The premium for Fastmarkets’ price assessment for steel billet, import, cfr main port Turkey, over the daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was $108.85 per tonne on August 1. This was down significantly from a year-to-date average premium of $137.20 per tonne.

Displaced Russian exports

The recent inflow of cheap Chinese material into Turkey has added to the factors behind the already decreasing flow of Russian billet into the Middle Eastern country, trade sources said.

Russia traditionally was the key supplier of billet to Turkey. But after its invasion of Ukraine in 2022, and the growing pressure of western trading sanctions, the loyalty of Turkish customers has gradually eroded.

In the first half of 2023, the country imported a total of 3.24 million tonnes of semi-finished steel, of which 1.85 million tonnes, 54%, originated in Russia. Malaysia, China and Indonesia supplied 151,000 tonnes, 52,810 tonnes and 81,216 tonnes respectively, according to data from Global Trade Tracker (GTT).

Meanwhile, in January-June 2024, when Turkey imported a total of 3.18 million tonnes of semi-finished steel products, Russia’s share fell to 27%, 862,521 tonnes. At the same time, Malaysia increased its supply of such materials to Turkey to 929,182 tonnes, and Indonesia to 309,156 tonnes.

Chinese volumes were not significant in the first half of 2024, but now, with prices falling dramatically, their presence has already exceeded 2023 figures.

Market sources said that Russian suppliers can now only get new billet orders from Turkey in two situations: either they reduce prices below the level available from China, or they sell only small volumes with prompt shipment to the north of Turkey, where the majority of ports cannot accept large cargoes and the re-rolling facilities are comparatively smaller than in mills in the south and west of the country.

“With recent Chinese billet bookings at $480-485 [per tonne] CFR Marmara and Iskenderun, it would be a great [stroke of] luck for Russian mills to get $498-500 per tonne CFR Turkish Black Sea ports for prompt shipment cargoes,” one semi-finished steel market source said.

He also said that Russian mills were currently offering material at prices in the range of $496-503 per tonne FOB, depending on the mill, which would equate to $511-523 per tonne CFR Turkish Black Sea ports. But he added that they would have several weeks to wait before closing their order books.

He did say, however, that Russian mills may consider selling this material domestically in the form of long steel, for which the pricing environment is much more favorable. Other mills, with large allocations, understand that they will have to cut prices to keep their market share.

GCC demand weak

Billet importers in the Gulf Co-operation Council (GCC) region received offers of China-origin billet at $505-510 per tonne CFR for September shipping, and estimated that the workable price would be about $500 per tonne CFR.

But extreme heat in the region, especially in the United Arab Emirates and Saudi Arabia, has resulted in a slowing of construction activity, market sources said.

Local rebar prices in the UAE have been stable since late May because of weak construction output.

Billet from Oman was recently offered to the UAE around $520 per tonne CPT. But buyers considered this price was high considering the weak demand, as well as the lower prices available from China.

Iran-origin billet is also occasionally available in the GCC countries at competitive prices.

“Buyers are in no hurry to book material in the region because of summer conditions. Most decision-makers are on holiday, and construction activity is unlikely to improve before September,” one trader in the UAE said.

“The market has been stable since early summer, and will remain stable until the end of August. I do not expect big-tonnage imports,” another GCC-based trader said.

Asian steel prices pushed down

Chinese steel exports have affected Asian markets disproportionately this year, with countries such as Vietnam, South Korea and Thailand among the largest importers of Chinese steel, according to customs statistics.

Lower Chinese prices and rising exports have forced regional mills in Southeast Asia to also drop their prices, to try to retain market share.

Fastmarkets’ price assessment for steel billet, import, cfr Manila, was $475-477 per tonne on August 1, falling week on week from $470-480 per tonne on July 25, and down from $500 per tonne on July 2.

This price pressure shows no sign of reducing, market sources said.

“We will only bid if prices come down to $450 per tonne CFR Southeast Asia for 5SP-grade billet, and I am very confident that spot prices will reach that level,” a buyer source in Southeast Asia told Fastmarkets.

Many offers are for billet from Chinese blast furnace steel, with 1SP- and 3SP-grade billet also heard being offered to Southeast Asia.

Major Indonesian steelmaker Dexin Steel has had to reduce its billet offer to $460 per tonne FOB to stay in the market.

Scrap demand in Asia remains poor

Negative effects from the volume of Chinese steel exports can also be seen in the major scrap import markets of South Korea and Vietnam.

Vietnam’s steel scrap imports rose by 4.17% year on year to 2.44 million tonnes in the first half of 2024, according to the latest customs data. But this pales in comparison with the 48.07% surge in overall steel imports, which reached 8.23 million tonnes in the first half of 2024.

Softer scrap import demand, linked to higher imports of steel products, weighed on prices, market sources said.

Fastmarkets’ weekly price assessment for deep-sea bulk cargoes of steel scrap, HMS 1&2 (80:20), cfr Vietnam, averaged $380-399 per tonne in June 2024, down by $5-12 per tonne from an average of $392-394 per tonne in June 2023.

South Korea imported 4.37 million tonnes of iron and steel products under HS code 72 from China in January-June 2024. If these volumes were repeated through the rest of the year, it would be the largest import volume from China since 2017.

At the same time, South Korea has also seen the biggest dip in production among the major steel-producing countries in Asia this year, with June volumes of 5.1 million tonnes, a 7.2% year-on-year decline, according to Worldsteel.

Fastmarkets’ monthly price assessment for steel scrap, HMS 1&2 (80:20), deep-sea origin import, cfr South Korea, averaged $335-380 per tonne in June 2024, down from $391-403 per tonne a year earlier.

The East Asian nation imported just 1.12 million tonnes of steel scrap in the first half of 2024, down from 2.12 million tonnes in the first half of 2023, according to South Korea customs data. This marked a year on year decline of more than 1 million tonnes, slightly more than 47%.

Follow the critical developments impacting the ferrous scrap market with our market coverage, short- and mid-term forecasts and market-reflective ferrous scrap price data. Find out more.

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It is the latest delay in an increasingly challenging environment for the European EV battery sector. BASF was itself forced to put its precursor battery materials plant in Harjavalta on hold following a decision by the Vaasa Administrative Court on February 21 this year.

Lower battery metals pricing have also knocked confidence in the recycling sector, according to market participants, while costs have spiraled at some projects, such as Li-Cycle’s large planned operation in Rochester, New York.

In Europe, several EV battery factories have either been delayed or cancelled over recent years, meaning that there is less input feedstock for recyclers than many firms had hoped.

Projects like Italvolt and Britishvolt have been cancelled, while ACC plants planned in Germany and Italy are on hold.

Although battery scrap generation is still relatively limited in Europe, significant capacities have been built to shred batteries and produce black mass.

But operational capacity to consume black mass remains low in Europe.

Several firms investing in post-processing technology have only been able to scale up to pilot or demonstration plant levels, with a major example being BASF, which itself has started operations at a prototype metal refinery for lithium-ion battery recycling in Schwarzheide, Germany.

As a result of the oversupply of materials in Europe, black mass payables are lower in the EU than in Asia.

Fastmarkets’ weekly assessment 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) were 55-60% on July 24, both unchanged week on week.

Fastmarkets’ weekly assessments for black mass, NCM/NCA, payable indicator, nickel, cif Southeast Asia, % payable London Metal Exchange nickel cash official price and for cobalt, cif Southeast Asia, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both 66-70% on July 24, down by 1-2 percentage points week on week from 68-71%.

Keep up to date with global market insights and predictions for the battery recycling and black mass market. Talk to us today.

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Fastmarkets’ analysts estimated around 155,000 tonnes of lithium-ion battery shredding capacity in the US in 2023, which is forecast to rise to almost 230,000 tonnes this year. But limited available feedstock means that most units will be unable to operate at healthy capacity utilizations.

“We expect just 90,000 tonnes of scrap batteries from end-of-life (EOL) and manufacturing scrap in the US this year, meaning more than twice as much shredding capacity as scrap battery feedstock,” said Julia Harty, senior energy transition analyst at Fastmarkets.

‘War’ for batteries?

For some new or expanded units in the region, it means a battle to get their hands on feedstock.

“In North America right now, there is a war for batteries. You might have the best technology to shred, but if you don’t have feedstock, you don’t have anything,” a North American recycling source said in May.

That quote was put to panelists at Fastmarkets’ Lithium Supply and Battery Raw Materials Conference 2024 last month in Las Vegas, and responses varied.

“This is the problem when you’re building much more capacity… If you produce precursor cathode active materials (pCAM) or CAM, recycling is one part of your supply,” Hans Eric Melin, manging director of consultancy firm Circular Energy Storage, said then. “You’ll always be able to source material, be it recycled or virgin material, but if you’re a recycler, there’s a limited supply [and] a lot of players in the same market.”

“What is really happening is that [recyclers] are driving up [scrap] prices, which is good for the [original equipment manufacturers] and others that have batteries, but it just becomes more and more difficult to make money from it,” Melin said.

“That is exactly the same situation we’ve had for five years in China,” he added. “The biggest cost for Chinese recyclers who recycle lithium iron phosphate batteries (LFP) is feedstock. What we are creating is a low-margin business by adding a lot of capacity.”

A major trader source, who has participated in tenders for production scrap from US original equipment manufacturers (OEMs), told Fastmarkets on Wednesday July 17 that the competition involved in the bidding process was “brutal.”

Production battery scrap was attracting bids from both North American and Asian firms – the latter of which were looking to export the materials – pushing up payables for the material close to levels seen in transactions for the further-processed black mass, he said.

Different types of capacity

But Ryan Melsert, chief executive officer at American Battery Technology Company (ABTC), said at the Las Vegas event that not all new capacity is created equal, drawing a distinction between those firms that can grind batteries into black mass and those that can close the loop by producing recycled battery metals from scrap batteries.

OEMs would be much more likely to supply their scrap to firms that fit the latter profile, he said.

“I think this is a normal supply-demand balance just like you have in most industries. There’s a lot of recycling capacity that has come along in the last year or two, but I don’t think it’s all the same quality of capacity,” Melsert said.

“The scrap market for spot has been around for quite a while, but a lot of the new material is coming from the big OEMs from their end-of-life material – from their service centers – and they only really want to work with companies who can sell them back recycled product,” he added. 

ABTC operates a recycling plant in the US state of Nevada that will have capacity to process 20,000 tonnes per year of battery feedstock material into recycled metals, with production scheduled to begin “early next year,” Melsert told Fastmarkets at the event.

For Tim Johnston, co-founder of recyclers Li-Cycle and Blue Horizon Advisors – where he’s also a partner – speaking about battery supply and demand is an oversimplification, with not all recyclers able to take all batteries.

“There are segments which are much more competitive than other segments. The material which is dry and doesn’t contain electrolytes – lots of people can process that material and you can export that material,” he said.

“Cell-to-pack architecture, embedded cells within packs which you can’t disassemble – much harder, fewer recyclers, less competitive, better economics. It’s not straightforward,” he added.

Furthermore, Harty expects any current supply tightness to ease over the coming years.

“Over the next 10 years, we expect the situation to improve as a flood of EOL batteries comes onto the market. From 2029 onward, the amount of scrap batteries will be greater than the amount of shredding that has currently been announced,” Harty said.

US scrap battery volumes are set to soar over the next 10 years. While only 6% of lithium-ion battery scrap in the global market was in the US last year, the percentage will rise to 11% by 2034, according to the latest Fastmarkets research estimates.

US overcapacity increases

Despite the new uplift in pre-processing recycling capacities, there is still a lack of post-processing capacity to consume black mass in the US, sources said.

“When we look at black mass refining, there is a significant undercapacity, with 20,000 tonnes of weighted refining capacity in the US expected in 2024,” Harty said.

“Companies are being more tight-lipped about potential expansions and new refining projects, as there have been a few high-profile examples of delays, spiraling costs and closures to refining projects,” Harty said.

Recycled battery materials firm Ascend Elements has a commercial-scale plant in Kentucky on track to open in the first quarter of 2025 for production of 1,250 tonnes of pCAM per month, according to the firm. Singapore-based lithium-ion battery recycling company Green Li-ion this year started producing battery-grade cathode and anode materials from black mass and cathode powder in Atoka, Oklahoma.

Major recycler Redwood Materials is also developing capacity to produce recycled battery metals in the US. But it is primarily consuming end-of-life batteries and production scrap collected at its plant in Nevada instead of black mass. Redwood is receiving more than 10 GWh per year of lithium-ion batteries, a company spokesperson said in May, but “we have not been feedstock constrained to need to source black mass.”

Other firms that have reportedly been developing capacity to consume black mass in North America include Li-Cycle’s Rochester, New York, project and Canada’s Lithion Technologies, which plans to start refining in the future after its recent start of shredding operations in Saint-Bruno-de-Montarville, near Montreal.

US exports set to continue?

As a result of the widening oversupply in black mass, most market participants expect that a significant volume of US black mass will continue to be exported over the short and medium term, while a portion of the material may be stored in warehouses until it can be processed domestically.

Talk of export restrictions or bans on US black mass are occasionally heard, but most market participants told Fastmarkets they don’t believe any will come to fruition anytime soon, if ever.

Rising South Korean capacity to consume black mass has provided a high-paying option for North American black mass, which has low metal impurities, fitting Fastmarkets’ specification of maximum 2% copper and 2% aluminium contents.

Spot deals in late June and early July were heard at 75-78% CIF Korea for payables of nickel and cobalt including value of lithium in US-origin NCM black mass, before weakening battery metal market sentiments caused Asian consumers to reduce bids for black mass in recent weeks.

Fastmarkets’ weekly 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) were both 68-75% on Wednesday July 17, down by 1-2 percentage points week on week.

The weekly 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 was 3-5% on Wednesday, unchanged week on week.

In the US market, offers were heard for black mass with 20-25% nickel content at payables of 75% ex-works US last week, with bids heard at 73-74% ex-works. Bids for NCM black mass with 15-20% nickel content and maximum 2% copper and alumnium content were heard from consumers in the US market at 60-65% ex-works.

Fastmarkets proposes to launch weekly assessments for black mass payable indicators, ex-works US from early August.

As for post-processing units, Harty expects “more capacity to come online” in the coming years but says it will be interesting to see what happens to surplus black mass in the meantime.

“Will this be exported to Asia, will it be used in pilot research and development projects or will it be stockpiled in anticipation of future refining projects?” she said.

“One thing is for sure – the dynamic battery recycling markets are sure to keep us on our toes,” she added.

Gain a competitive edge with our lithium prices. Talk to us about our market-reflective lithium prices, data and analysis.

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Bearish sentiment prevails in spot lithium market

Ongoing sluggish demand and oversupply in the lithium market has led to bearish sentiment toward the near-term outlook among delegates at the conference.

“Chile’s lithium carbonate and Australia’s spodumene are still being shipped to China in large volumes, and new lithium projects are coming online. We are having a big oversupply issue,” a trader said.

“I believe there’s still downside room for lithium prices,” the trader added.

Multiple delegates at the conference told Fastmarkets that they didn’t see any support for demand to pick up in the near term.

Some other delegates expected some restocking in the third quarter, or before China’s National Day holiday (October 1-7), which could result in a rebound in lithium prices.

“Even if there’s rebound due to restocking demand, it will be short-lived, as in general the demand is still weak,” a Chinese lithium producer source said.

Rising African spodumene supply adds pressure to lithium market

Africa will become more and more important in terms of lithium supply, further adding pressure to an oversupply market, Fastmarkets learned at the conference.

Some major Chinese lithium producers have established vertically integrated lithium mine projects in Zimbabwe, including Huayou Cobalt, Chengxin Lithium and Yahua Lithium, as well as Sinomine. Some sources expect more supply to be released from these projects later this year.

In recent months, Fastmarkets heard that direct shipping ores of spodumene had already been shipped to China in large volumes from Africa.

“With the rising lithium hard rock supply from Africa, Australian spodumene will be under greater downward pressure amid existing oversupply and weak demand,” a trader said.

“We have already been sourcing spodumene from Africa from this year, as the prices are more competitive than Australian spodumene,” a second Chinese lithium producer source said.

Major producers say auctions add price transparency, efficiency

Top executives from Albemarle Corporation and Pilbara Minerals believe recent auctions of spodumene and lithium products are adding pricing transparency and trading efficiencies into the market.

“The end goal is to really create greater visibility and transparency around all forms of pricing at all different product levels within the supply chain, and to do so in a way that you can trust,” Eric Norris, president of energy storage at Albemarle, said during the Leaders’ Keynote Debate on June 25. “I’m not saying the data that’s out there today is untrustworthy, I’m just saying it’s thin. The amount of information that goes into that doesn’t come robustly from the marketplace.”

Scrutiny of reported prices from price reporting agencies (PRAs) has grown in recent years while the global lithium market has experienced shifts in market size, structure and pricing mechanisms.

Fastmarkets harnesses a variety of data when assessing its lithium and spodumene price assessments, ensuring transparency into the “tradeable level” in the open and competitive spot market.

The US-based spodumene and lithium producer’s strategy for most of its business will remain focused on long-term contracts, according to Norris.

But the hope is that the auctions will help minimize price distortion by providing a satisfying reference point for both buyers and sellers, he said.

The auctions “potentially allow the industry to contemplate hedging to mitigate some of the pricing risks as well,” he added.

Dale Henderson, chief executive officer of Australian spodumene producer Pilbara, believes the auctions are enabling better trading efficiency, with more market maturity still to come.

“What we need to move to is more efficient trading methods, as seen in other markets,” he said.

“The auctions that have been occurring over the last couple of years – in particular this last year – are enabling that better efficiency, but ultimately there is much more to go for the industry.”

Henderson outlined three key steps for the market’s evolution:

• Unifying product specifications and trading terms,
• Supporting sufficient volumes from both buyers and sellers,
• And coming together as an industry at a common marketplace.

Auctions are not uncommon in other commodity markets and can provide transparency to market prices, when full transparency regarding details and terms is provided.

These auctions, when normalized where appropriate, can be used by Fastmarkets in the price discovery process for lithium and spodumene.

Fastmarkets’ latest weekly price assessment for lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp US and Canada was steady at $13.80-15.00 per kg on July 3. The corresponding assessment for lithium hydroxide monohydrate LiOH.H2O, 56.5% LiOH min, battery grade, spot price ddp US and Canada was also unchanged, at $13.50-14.50 per kg on the same day.

Pricing mechanisms remain focal point for market

With auctions becoming more commonplace, and new sources of supply coming into the market, attention on pricing mechanisms continues to grow.

The lithium market has seen a number of fundamental changes in this regard, shifting from a system of largely fixed-price long-term contracts to the adoption of PRA-published price assessments forming the basis of contracts.

Other shifts have also taken place, including the move toward forward-facing quotation periods in contracts.

Participants across the value chain noted that there was still room for further development in pricing mechanisms in the lithium market. However, one key trend that is rapidly emerging is the use of payables in spodumene pricing.

This is where, particularly in longer-term contracts, the value of spodumene is derived from a percentage of the price of lithium carbonate or hydroxide, depending on the contract.

This ensures greater connection between the two products, since spodumene is used as a feedstock in the production of lithium hydroxide and carbonate.

“This is exactly what we’ve been waiting to see in lithium,” one financial market participant told Fastmarkets. “It’s a sign of a market maturing.”

The reason for this shift, beyond the increased pricing relationship, is that it also enables more effective hedging across the lithium value chain, with participants able to utilize mechanisms such as the Chicago Mercantile Exchange’s cash settled futures contracts for hydroxide and carbonate.

Battery recyclers adapt to survive

After a challenging 12 months, battery recycling market participants arrived in Las Vegas less bullish than last year, with the focus being on survival in the current market environment.

Financial issues have delayed progress of some major Western entrants into the sector, while weaker battery metal prices and stronger black mass payables amid stiff competition in Asia have hampered conversion margins for black mass consumers.

One way to maximize value from recycling is selling streams of copper at high prices to offset low lithium and cobalt prices, Ryan Melsert, CEO of American Battery Technology Company (ABTC), said.

Recycling companies must “stay close” to customers such as OEMs and iron out technological issues to thrive, according to Tim Johnston, co-founder of Li-Cycle and partner at Blue Horizon Advisors.

Meanwhile, a conference delegate speaking on the sidelines was more philosophical about the need for partnerships at this time: “At winter, a lone wolf dies, but the pack survives.”

Cobalt finds support with lithium attendees from need to recycle

Cobalt found some favor at the conference from a recycling standpoint, with delegates viewing nickel-manganese-cobalt (NMC) batteries as a “ready-made” product for reuse after recycling while noting hurdles to overcome for lithium-iron-phosphate (LFP) batteries.

“For LFP, there is little appetite for recycling the iron phosphate – it’s basically waste – but NMC output can go straight back into new batteries and other sectors also,” Austin Devaney, senior commercial advisor for Piedmont Lithium, said.

Presenters also felt that the current low-price environment for many critical metals is having an impact on new operations that are trying to enter supply chains.

“At current lithium prices, new lithium projects do not make sense and prices are concerning at these levels; many in the West will operate at a loss” Norris said.

Cobalt standard-grade metal prices are at 8-year lows currently, due to a persistent oversupply that is overhanging the market. Battery-grade lithium hydroxide prices on a CIF China, Japan and South Korea (CJK) basis are at their lowest level since April 2021.

Ready to deepen your understanding? Find out more about Fastmarkets’ battery raw materials insights and prices today and stay informed about all the critical developments in the battery raw materials market.

The post What we learned at the Lithium Supply and Battery Raw Materials conference 2024 appeared first on Fastmarkets.

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.

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