[SMM Analysis] Review of the Cobalt Market During the 2026 Chinese New Year Holiday and Post-Holiday Outlook

I. Cobalt Price Review During Chinese New Year

During the 2026 Chinese New Year holiday (February 15 to February 23), domestic refined cobalt night session trading prices rebounded slightly from previous lows. The spot market was relatively sluggish due to logistics suspensions.

Overseas prices showed divergence; the MB standard-grade cobalt low-end held steady, while the high-end increased by $0.1/lb. Alloy-grade cobalt prices rose, with the low-end up $0.3/lb and the high-end up $0.4/lb. Cobalt hydroxide CIF China prices remained stable.

II. Market Dynamics

Cuba's fuel shortage will force Sherritt to suspend its nickel-cobalt operations: Due to persistent tight fuel supply in Cuba, Sherritt International Corp. is expected to suspend mining and processing at its Moa nickel-cobalt joint project, having already scaled down operations ahead of the suspension. The operation is expected to enter a shutdown state in the short term, with planned maintenance carried out during the downtime. Failure to deliver fuel was the direct cause of the suspension; the company is communicating with relevant parties and evaluating alternative supply sources. The project, a partnership with state-owned General Nickel Company SA, typically ships semi-finished products to Sherritt's Alberta refinery in Canada, which has an integrated capacity of approximately 38,200 mt; however, this production volume is relatively small in the global nickel supply context, so the impact on the international market is limited, but it poses challenges to the company's finances and the Cuban economy. Meanwhile, Energas SA, an energy joint venture one-third owned by Sherritt, continues normal operations, supplying natural gas for power generation to the Cuban grid, unaffected by this incident. Overall, the suspension reflects the direct constraints that Cuba's prolonged economic and energy crises impose on industrial projects.

Sumitomo's Madagascar nickel-cobalt project closes due to cyclone damage: On February 18, Sumitomo Corp. stated that its Ambatovy nickel-cobalt project in Madagascar was closed due to facility damage caused by Tropical Cyclone Gazaane, which hit the island last week. In a statement, the company said operations were suspended immediately once the cyclone's approach was evident, with safety as the top priority. The report added that a detailed assessment of the damage, including equipment condition, and its impact on revenue is currently underway. Sumitomo will work to identify the extent of the loss as soon as possible and collaborate with relevant parties to implement appropriate recovery and reconstruction measures, the government added. A company spokesperson said the timing for restarting operations is undetermined, and assessing the damage is expected to take several weeks. Ambatovy is owned by Sumitomo and state-owned Korea Mine Rehabilitation and Resources Corp. (KOMIR), which produced approximately 28,000 mt of nickel and about 2,500 mt of cobalt in 2024.

III. Post-Holiday Outlook

Supply side, cobalt raw materials from the DRC remain difficult to replenish in the short term, and enterprises face pressure from raw material shortages. Coupled with production halts at some enterprises during the Chinese New Year holiday, production plans have been reduced. Refined cobalt production in February is expected to remain low, with overall cobalt salt supply declining slightly.

Demand side, prior to the Chinese New Year, some downstream ternary cathode precursor enterprises, concerned about potential price increases for cobalt sulphate after the holiday, showed improved purchase willingness compared to earlier periods and actively sought quotations. However, due to imminent logistics suspensions at the time, actual transactions were relatively limited. As logistics resume after the holiday and downstream enterprises gradually resume production and restock, demand is expected to be gradually released.

Looking ahead, against the backdrop of continued support from raw material costs, phased supply tightening, and phased demand recovery, prices for refined cobalt and cobalt salts are expected to resume an upward trend.