[Bojo,Battery] "Decline, Stop"... Positive Electrode Material Prices Rebound After 14 Months

13 Consecutive Months of Decline Since March Last Year
May Exports of Cathode Materials at $27,683 per Ton
Up $45 from Last Month

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Unit = USD per ton, Source = National Tax Service Export-Import Trade Statistics

The export price of cathode materials rebounded for the first time in 14 months since March last year. Although slight, this signals that the stabilization phase of raw material prices has begun to be reflected in actual selling prices. This is interpreted as having a positive impact on the profitability of cathode material companies.

According to customs export-import trade statistics on the 1st, the average export price of NCM (Nickel-Cobalt-Manganese) and NCA (Nickel-Cobalt-Aluminum) cathode materials in May last month was recorded at $27,683 per ton (approximately 38.34 million KRW). This is about $45 higher than $27,628 per ton (approximately 38.26 million KRW) in April. Although a small figure, the export price of cathode materials had fallen consecutively for 13 months since March last year. The halt in this downward trend is analyzed as a positive sign. The export price of cathode materials recorded $53,394 per ton (approximately 73.95 million KRW) in March last year and has fallen by nearly 50% over the course of a year.

The decline in raw material prices such as lithium and nickel caused cathode material prices to stagnate. Cathode material prices are greatly influenced by raw material prices such as lithium and nickel, which have continuously fallen. Lithium recorded 581,000 yuan per ton in November 2022 and dropped to the 80,000 yuan range by the end of last year. It has slightly risen to around 100,000 yuan now, stabilizing the downward trend. Nickel prices have also risen from about $16,000 in January this year to nearly $20,000 currently. The time lag between raw material prices and actual selling prices is about 3 to 6 months, and the slight rebound in cathode material prices appears to be the result of most of the raw material price declines being reflected. If the rising raw material prices this year are reflected in selling prices, profitability could improve significantly.

Cathode material companies conclude contracts linking mineral prices such as lithium and nickel with selling prices. The selling price is based on the mineral price at the time of selling the final product, the cathode material, not the price when purchasing the minerals. When mineral prices fall, companies buy high and sell low, but when mineral prices rise, they buy low and sell high. The increase in product prices due to price rises, which increases the margin companies earn when selling actual products, is called the 'Lagging Effect.' Battery companies are hopeful for profitability improvements this year due to the lagging effect.