[SMM Analysis] Cobalt Market Lingers at Low Levels, Bottom-Seeking Path Not Over

Refined Cobalt:

This week, the spot price center for refined cobalt continued to shift lower, showing a drift lower. On the supply side, mainstream smelters lowered their ex-works prices to 355,000 yuan/mt, while other small and medium-sized smelters, facing increasing losses, have basically suspended external quoting. After a period of sustained destocking, the inventory available for sale held by traders had dropped to a relatively low level. Some enterprises, based on bullish expectations for the future market, began to slow down their selling pace, and for the few still quoting, the spot-futures price spread remained in a premium range of 1,000-10,000 yuan/mt. On the demand side, downstream enterprises were still in their summer break cycle, with generally weak purchase willingness, only maintaining a small amount of essential restocking. Overall, from July to August is the traditional consumption off-season for refined cobalt, with limited demand-side support, and prices are likely to remain under pressure in the short term.

Cobalt Intermediate Products:

This week, trading in the cobalt intermediate products market remained sluggish, with limited transactions and a slow decline in the price center. Recently, some Chinese-funded miners launched tenders for intermediate products, with indicative prices falling below $22/lb. Affected by the continued weakness in cobalt salt and refined cobalt prices, the psychological price level of downstream smelters and traders for raw materials has further pulled back to around $20-21/lb, with some even only willing to accept prices below $20/lb, resulting in no actual deals being concluded. In the short term, miners' willingness to hold prices firm remains, but downstream demand lacks sufficient support, and the tug-of-war continues. A price recovery still needs to wait for the recovery of actual demand.

Cobalt Sulphate:

This week, the divergence between upstream and downstream in the cobalt sulphate market further intensified, with limited actual transactions. On the supply side, primary smelters using intermediate products and MHP, supported by costs, held their quotations firm above 80,000 yuan/mt; recycling enterprises, relying on raw material cost advantages, concentrated their quotations at 76,000-78,000 yuan/mt, while a few enterprises actively selling could lower prices below 75,000 yuan/mt. On the demand side, it remained sluggish, with downstream enterprises' purchase willingness inadequate, tending to seek non-standard or old stock sources to push down procurement costs. Recently, there were transactions for substandard products and old goods below 73,000 yuan/mt. After adjusting for quality, the actual price difference compared with new products is limited, but in a weak demand environment, this price level is used by downstream as a bargaining benchmark, causing some recycling enterprises to passively follow the price reduction. Additionally, after the sustained drop in refined cobalt prices, the cost of producing cobalt sulphate by re-dissolving refined cobalt has fallen to 72,000-73,000 yuan/mt, further reinforcing downstream expectations of pushing for lower prices. In the short term, the cobalt salt market is in a slow decline trend. Market stabilization and recovery still need to wait for the release of concentrated restocking demand from downstream. This period is expected to be after mid-to-late August.

Cobalt Powder:

This week, the cobalt powder market continued its weak trend, with mainstream producers quoting 455,000-465,000 yuan/mt, some transaction prices falling to 450,000 yuan/mt, and low-priced offers in the trader segment touching 440,000-450,000 yuan/mt. Pressure along the industry chain continues to gradually transmit upward. Downstream cemented carbide enterprises, constrained by end-user order performance, have not seen an increase in raw material consumption speed, and the procurement pace has lengthened. Except for long-term contract orders, spot order transactions are relatively limited. The willingness to sell in the intermediate trade link has strengthened somewhat, and some low-priced resources have further dragged down the market's psychological price level. On the raw material side, cobalt carbonate prices remain under pressure, and after approaching the 200,000 yuan/mt threshold, market trading has tended to stagnate, lacking effective transaction guidance. Market sentiment-wise, most participants adopt a wait-and-see attitude, generally believing that the market will only improve after August-September.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Feng Disheng 021-51666714

Lv Yanlin 021-20707875

Xiao Wenhao 021-51666872

Zhang Haohan 021-51666752

Wang Zihan 021-51666914

Wang Jie 021-51595902

Xu Yang 021-51666760

Yang Lianting 021-51595835

Wang Zhaoyu 021-51666827