Current manufacturer expectations for this month and April remain cautious, with some companies having already lowered their April production forecasts.

On the demand side, the EV battery market has seen order contractions compared to earlier expectations, impacted by lackluster new energy vehicle sales both domestically and internationally.

Electra Battery Materials (NASDAQ, TSXV: ELBM) has signed a fresh deal with LG Energy Solution that would see the company supply battery-grade cobalt to the South Korean firm through at least 2029. The parties on Tuesday signed a new term sheet outlining Electra’s commitment to supplying 60% of the cobalt sulfates produced at its Ontario refinery, which is currently under construction. The supply agreement is valid through 2029, plus a three-year extension option. This agreement follows an initial three-year agreement signed in 2022 and the subsequent five-year extension announced in July 2023, reflecting Electra’s updated production timelines under the contract.

Canadian battery materials company Electra Battery Materials has updated and signed a binding long-term cobalt supply agreement with global lithium-ion battery manufacturer LG Energy Solution, reaffirming their continued partnership. Under the new agreement, LG Energy Solution will secure 60% of the output from Electra’s cobalt sulfate refinery in Ontario, Canada, through 2029, with an option to extend the contract to 2032. The remaining approximately 40% of capacity remains uncommitted, providing Electra with greater flexibility to capture potential upside during future pricing cycles. The refinery, currently under construction, is set to become North America’s first battery-grade cobalt sulfate facility.

This week, ternary material prices edged slightly downward. From a raw material perspective, nickel sulfate, cobalt sulfate, and manganese sulfate prices remained relatively stable with no significant fluctuations. The primary downward pressure on prices came from lithium sulfates: spot prices of lithium carbonate and lithium hydroxide saw notable declines in early week, weakening the cost support for ternary materials. Despite the pronounced decline in lithium sulfate prices early this week, ternary cathode material manufacturers showed relatively limited restocking interest. There are two main reasons for this: First, prior to the price adjustment, most cathode manufacturers had already finalized March orders with downstream battery cell makers and are currently in the order delivery phase , maintaining relatively sufficient raw material inventories. Second, manufacturers generally maintain a " buy on rising, not on falling " mentality, viewing this adjustment primarily as short-term volatility influenced by international situations, with no expectation of sustained lithium sulfate price declines. In terms of pricing, although lithium carbonate futures prices experienced adjustments, cathode manufacturers' quotations did not see significant declines, mainly because their raw material costs remain higher than current futures prices . Spot market transactions were also quite subdued this week, with market activity dominated by long-term contract supplies. On the demand side, the EV market showed seasonal recovery, but downstream customers' order fulfillment pace remained slow due to Q1 new energy vehicle sales falling short of expectations . In contrast, e-mobility and consumer electronics markets saw relatively notable growth, primarily driven by some consumer batteries facing "export rush" demand , leading to forward order placements.

Although March traditionally marks a demand recovery period and represents the final deadline for "export rush" orders ahead of policy changes, leading to a significant MoM increase compared to February, the magnitude of this recovery is expected to be more limited than pre-holiday forecasts suggested.

Recently, the Ecology and Environment Bureau of Fuzhou City, Fujian Province, published a public notice regarding the approval decision on the environmental impact assessment document for the "Power Battery Recycling Comprehensive Utilization Project of a Company in Fujian." Upon completion, the project will be capable of recycling and processing 40,000 tons of waste power batteries annually. This includes the cascading utilization of 12,000 tons of batteries per year and the production of 30,000 tons per year of battery raw materials (copper powder, aluminum powder, electrolytic nickel, high-purity nickel sulfate solution, electrolytic cobalt, high-purity cobalt sulfate solution, crude manganese carbonate, high-purity lithium sulfate solution, and copper sponge, etc.).

Looking ahead to March, production is expected to rebound as operations resume and the traditional demand recovery period begins. However, due to sluggish auto sales, weak overseas demand for ternary materials, and persistently high raw material prices, the pace of recovery may fall short of pre-holiday expectations.

South Korean company Cosmo Chemical announced on the 23rd that it has signed a memorandum of understanding (MOU) with a producer located in Indonesia—affiliated with a Chinese group that holds the world’s largest market share in ternary precursor materials—to establish a long-term supply partnership for battery-grade nickel sulfate and cobalt sulfate. Under the agreement, from this year through 2030 the two parties will cooperate on the stable procurement and supply of battery-grade nickel and cobalt sulfate, with planned annual deliveries of approximately 2,000 tons. Based on current market prices, the total value could reach up to KRW 200 billion.

Although raw material prices are currently at a relatively low stage, market sentiment has not improved significantly.