December 2025 is emerging as a pivotal month for the battery metals complex. Lithium carbonate prices are stabilizing with a slight upward bias, driven by a 10-15% month-on-month surge in recycling procurement volumes as LFP plants engage in hedging. Concurrently, the recycling sector is undergoing a structural pricing shift as SMM launches new payable indicators for black mass. This move marks a maturation of the market, moving away from aggregate pricing toward precise component valuation for nickel, cobalt, and lithium, enabling better arbitrage as ternary hydrometallurgy plants ramp up procurement.
The lithium carbonate market is showing signs of a technical rebound after months of volatility. In late November and early December, procurement volumes for lithium battery recycling increased by approximately 10-15% month-on-month. This uptick is driven primarily by the release of downstream demand, prompting Lithium Iron Phosphate (LFP) hydrometallurgy plants to engage in large-scale hedging.
This strategic stockpiling has pushed the volume of recycled lithium chemicals to exceed 9,000 metric tons in October, a nearly 15% increase month-on-month. The robust production schedules for lithium carbonate suggest that manufacturers are bracing for a potential supply squeeze or price floor, actively resisting the bearish sentiment that plagued Q3 2025.
While lithium stabilizes, the nickel sulphate market remains sluggish. As of December 3, the battery-grade nickel sulphate index sat at 27,287 yuan/mt, with average prices declining due to weak purchasing sentiment from precursor plants. Conversely, cobalt sulphate production in China rose 16.4% year-over-year in November, driven by the economic efficiency of recycling channels, which now account for 27% of raw material supply.
Lithium: Bullish. The 10-15% rise in recycling procurement and hedging activity indicates a short-term price floor has been reached. Expect continued strength through Q1 2026 as downstream demand releases.
Nickel: Bearish/Neutral. High inventory levels and sluggish procurement will likely keep a lid on nickel sulphate premiums in the immediate term, despite broader macro factors like potential US Fed rate cuts.
Black Mass: Bullish. Rising metal prices are lifting payables.