Bearish battery feedstock markets weigh on cathode prices: Cathode Q3 2026 Price Review

Image credit: BASF
Image credit: BASF

Prices of all chemistries of cathode active material fell throughout Q3 2026, driven by across the board declines in raw material prices.

LCO (lithium cobalt oxide) prices (DDP China) clocked the steepest drop, falling 16% to RMB 327,500/tonne (USD 48,798). LFP cathode prices (DDP China) fell 7.8% to RMB 56,000/tonne (USD 8,344) whilst NCM622 fell 11.2% to RMB 166,500/tonne (USD 24,806)

“Q3 extended the broad cathode softening that closed out Q2,” said Frederick Bloomfield, a senior price analyst at Benchmark. “This quarter has been almost entirely characterised by cobalt bearishness weighing on feedstock prices and thus lowering the price of cobalt-containing CAM. Moreover, the growing discrepancy between what LFP producers are reporting about costs versus what LFP cathode prices actually did piqued curiosity.”

How are nickel-based chemistries responding differently this quarter?

Raw material prices weakened the price of NCM, NCA and LCO CAM this quarter. Falling LCO CAM prices were compounded by weak demand from the portables segment and NCM substitution.

NCM and NCA grades fell less sharply, with mid-nickel falling most out of the nickel-based chemistries and low-nickel falling the least. Like LCO, nickel-based cathode prices were weighed down by lower input costs, including lithium and cobalt, as well as ample cell supply and ad hoc procurement strategies.

The usual uptick in prices during the seasonal restocking across September-October did not materialise, instead underwhelming downstream demand, especially from the domestic Chinese EV sector, contributed to downward pressure on pricing levels. This was evidenced towards the end of the quarter as NCM811's decline decelerated because of support from overseas EV demand, whilst the other grades used more commonly in Chinese EVs continued their descent.

Why did LFP cathode prices fall through the summer despite rising feedstock costs?

LFP CAM prices fell significantly during Q3 as weaker lithium carbonate prices (-20.8% q-o-q) fed into lower cathode prices, despite robust LFP demand. Alongside bearish and volatile lithium carbonate prices, utilisation rates were high as LFP CAM production ramped up, leading to ample downstream supply.

The effect of these developments outweighed rising purified phosphoric acid and ferrous phosphate prices throughout most of the quarter. However, these factors did continually squeeze the margins at LFP CAM producers, resulting in Hunan Yuneng, a major Chinese LFP CAM producer, announcing a price increase across its LFP range in July, citing "global geopolitical fluctuations and supply chain disruptions". Towards the end of the quarter, this was reflected in Benchmark’s LFP CAM prices as they ticked upwards on the back of higher feedstock pricing.

What's driving the phosphoric acid and sulphur cost pressure on LFP producers?

Shrinking inventories, limited spot volumes and sulphur supply chain disruptions have pushed purified phosphoric acid (PPA) and ferrous phosphate prices higher since June 2026. Benchmark tracked a 4.6% increase in its ferrous phosphate (anhydrous) price grade across the quarter.

Furthermore, some Chinese Tier 1 battery producers have started including PPA directly in their cathode price negotiation formulae, after PPA prices surged through the quarter, a knock-on effect of the same sulphur cost pressures that hit nickel's Indonesian HPAL sector

What to look out for in Q4 2026

The price of lithium chemicals continues to be a key driver behind the pricing of all CAM chemistries, so future lithium price movements will be an area to watch closely. Benchmark forecasts lithium prices to increase in Q4 2026, with this sentiment echoed by many market participants who expect a frontloading of demand in the lead up to the upcoming VAT rebate removal in China.

Furthermore, following the steep drops in cobalt this quarter and Benchmark’s bearish near-term outlook, industry players will also be looking for some price support here to prevent further price freefall of cobalt-containing cathode material.

“If tight margins at LFP CAM producers stemming from elevated ferrous phosphate and PPA prices continue, this will also be a key dynamic to monitor as LFP CAM prices may decouple from broader cathode pricing trends,” Bloomfield said.

Read more Q3 Price Reviews:

For more information about the service this data draws from, get in touch

Want to read more analytical content?
Create a Free Account

Create a free Intelligence account to access 3 content pieces per month.

Related Content