Phosphoric acid prices included in cathode price negotiations amidst strained sulphur supply

Some Chinese Tier 1 battery producers have started including purified phosphoric acid (PPA) in their cathode active material (CAM) price negotiation formulae, as supply deficits of the input have led to soaring prices, Benchmark understands. These elevated prices are a result of global tightness in sulphur supply, caused by the closure of the Strait of Hormuz and drone attacks on Russian gas processing plants. The sulphur disruption has particularly impacted wet-process PPA producers which have cut output and delayed the commissioning of new projects. In recent months, wet-process PPA prices have climbed above that of thermal-process PPA which historically commands a higher price as it requires significantly more electricity and higher-grade ore feedstock.