[SMM Cobalt Morning Meeting Summary] Offers outside China soften, off-season demand weak, industry chain prices under pressure.

Refined Cobalt:

The decline in spot refined cobalt prices widened this week, with the overall market sentiment weakening. On the supply side, mainstream smelters lowered their ex-works prices to 340,000 yuan/mt, while other small and medium-sized smelters largely suspended external quoting due to continued loss-making pressure. On the demand side, downstream enterprises remained in their summer break cycle, with weak purchase willingness and only maintaining minimal, rigid restocking. This week's price drop was mainly sentiment-driven, as overseas spot and futures quotation platforms also synchronously lowered their quotes. Previously relatively firm prices outside China showed signs of cracking, creating significant downward pressure on the mentality of the Chinese market. Coupled with the recent continued weakening of Chinese cobalt salt and intermediate product prices, bearish market sentiment gradually heated up. Some suppliers who had previously been on the sidelines began selling off, further intensifying downward price pressure. Overall, the current period marks a traditional off-season for cobalt consumption, with limited demand-side support. Alongside weakening overseas prices and a bearish turn in market sentiment, prices are likely to remain weak in the short term.

Intermediate Products:

The cobalt intermediate product market remained sluggish this week, with actual transactions still limited. Recently, some miners have initiated multiple intermediate product tenders, but none have resulted in actual deals due to the significant divergence in price expectations between upstream and downstream players. The latest tender indication price was around $21-21.5/lb. Affected by the persistent weakness in cobalt salt and refined cobalt prices, the psychological price level of downstream smelters and traders for raw materials further pulled back to around $18-19/lb, with some enterprises even only able to accept $17/lb. The price gap with miners' offers continued to widen, making actual transactions difficult to conclude. In the short term, despite miners' willingness to hold prices firm, downstream demand support is insufficient, and the tug-of-war between sellers and buyers is continuing. A price recovery still needs to wait for a recovery in actual downstream demand.

Cobalt Sulphate:

The cobalt sulphate market remained sluggish this week, with the upstream-downstream stalemate persisting. On the supply side, primary smelters using intermediate products and MHP, supported by costs, continued to hold their offer prices firm above 80,000 yuan/mt. Mainstream recyclers maintained their quotes near a 5% discount to SMM's low-end price, while a few enterprises with a higher willingness to sell had shifted their quotes down to 70,000-73,000 yuan/mt. Some extreme low prices, even slightly below 70,000 yuan/mt, were heard. Demand side performance remained weak, with downstream purchase intention prices continuing to drop, and some extreme inquiries suppressed to below 70,000 yuan/mt. In the short term, cobalt sulphate prices still face certain downward pressure. A stabilization and recovery of the market still need to wait for the release of concentrated downstream restocking demand.

Cobalt Chloride:

The cobalt chloride market remained sluggish this week, with actual transactions still dull. On the supply side, the real-time costs via recycling and refined cobalt back-financing routes had already fallen significantly below market offer and transaction prices. However, upstream smelters were burdened by heavy high-cost inventory accumulated earlier, making it difficult to dilute costs through low-price procurement against a backdrop of persistently weakening prices. Supported by inventory costs, offers still appeared relatively firm overall. Nonetheless, some enterprises, to accelerate turnover and alleviate loss-making pressure, successively lowered their offer prices slightly to promote sales. However, downstream purchasing power was insufficient, and the price cuts had a limited boosting effect on transaction volumes. On the demand side, Co3O4 producers' own inventories remained high, compounded by a lack of improvement in end-use consumption, leading to low purchase willingness. In the short term, cobalt chloride prices still face certain downward pressure.

Cobalt Salts (Co3O4):

The market trading atmosphere for Co3O4 was sluggish this week, with very few actual transactions. On the supply side, producers generally maintained low operating rates against a backdrop of high inventory, meager profits, and the lingering risk of inventory buildup. On the demand side, although cathode material plants made some inquiries, few inquiries led to actual procurement. Their current raw material inventory can still cover their production needs, so there is no urgent requirement for restocking. Overall, the possibility of continued weakening in Co3O4 prices exists in the short term.

Cobalt Powder and Others:

The cobalt powder market remained weak this week, with actual transactions still sluggish. On the supply side, mainstream producer offers stayed within the 440,000-460,000 yuan/mt range, with some actual transaction prices already dipping to 430,000-440,000 yuan/mt. Low-priced offers in the trade segment increased, further lowering the market's psychological price level. The price of the raw material, cobalt carbonate, was under pressure, with some quotes already falling below the 200,000 yuan/mt threshold, and market trading was tending to stagnate due to a lack of effective transaction guidance. Downstream cemented carbide enterprises continued to be constrained by terminal order performance, with no increase seen in the rate of raw material consumption, and their procurement pace remaining slow. Spot order transactions were relatively limited outside of long-term contracts. From the perspective of market sentiment, most participants adopted a wait-and-see attitude and generally believed that no significant improvement in the market would occur in the short term.

Ternary Cathode Precursor:

Ternary cathode precursor prices declined this week, as nickel sulphate prices fell slightly, cobalt sulphate prices dropped significantly, and manganese sulphate prices edged lower during the week.

In terms of discounts, for orders in August and Q3, some producers had the intention to raise discount levels due to the previously high cost of sulphate raw materials. For long-term contracts, most producers' coefficients had been negotiated at the beginning of the year, and the coefficients for the majority of producers had not yet been raised. Downstream acceptance of a coefficient increase for quarterly contracts was also weak. Except for some top-tier producers who have certain bargaining power, most producers' coefficients remained stable overall compared to Q2. For spot orders, due to the relatively weak recent performance of nickel and cobalt salt prices, some downstream enterprises sought toll processing. The order coefficients for August were expected to remain stable overall compared to July.

On the production front, export orders for top-tier producers still performed well this month, with production schedules staying at high levels. The production load at China's top-tier domestic producers also recovered significantly, but some small and medium-sized producers still had relatively low production schedules due to the off-season.

Looking ahead, sulphate prices have yet to show a significant rebound. For subsequent new order pricing, attention needs to be paid to the downstream restocking pace in Q3.

Ternary Cathode Material:

Ternary cathode material prices were basically flat this week, extending their phase of consolidation at lows. Looking at the raw material side, nickel sulphate price performance was relatively weak, cobalt sulphate prices continued their downtrend with a relatively significant decline, while lithium carbonate and lithium hydroxide continued to consolidate at low levels. In terms of trading sentiment, some cathode plants and battery cell manufacturers only made small-batch, rigid restocking purchases with relatively limited procurement volumes. The overall market still held expectations of a downward price revision for the future. Regarding discounts, there were no adjustments to nickel, cobalt, and lithium discounts recently. With the imminent reinstatement of the lithium battery consumption tax, battery cell manufacturers may pass some cost pressure upstream, and expectations for an upward adjustment in discounts were weak. On the demand side, orders grew steadily with some increase in August, and demand from both the Chinese and overseas EV markets remained high; however, the consumer market showed no clear signs of recovery.

LCO:

The LCO market operated relatively steadily this week. On the supply side, the downstream demand recovery has been slow, and both production and shipments from various enterprises have remained at low levels since the beginning of the year. The price reduction strategy adopted to compete for market share has noticeably narrowed profit margins, but actual shipment volumes have not improved simultaneously. On the demand side, although battery cell manufacturers' production schedules picked up slightly, the growth was not smoothly transmitted to the LCO segment. The increasing proportion of downstream switching to ternary materials was also a significant influencing factor. The overall assessment is that LCO prices still have the potential to decline recently.

News:    

[Honda Raises Full-Year Profit Forecast on Weaker Yen and Strong US Hybrid Vehicle Demand] Honda Motor Co. raised its profit forecast after releasing its quarterly results, as a weaker yen and strong demand for hybrid vehicles in the US market boosted its performance. The Japanese automaker now expects an operating profit of ¥650 billion for the fiscal year ending March 2027, up from its previous estimate of ¥500 billion. The average analyst forecast for the fiscal year profit is ¥676 billion. Honda expects full-year sales to reach ¥24.15 trillion, higher than its prior estimate and the analyst forecast of ¥23.2 trillion. Honda expects a profit rebound this fiscal year, primarily relying on currency advantages and US market demand. At the same time, the company is working to restructure its underperforming automotive business. Honda booked a ¥2.5 trillion impairment loss in March, leading to its first annual loss since its founding in 1948. Honda's lackluster model lineup had previously made it difficult to compete with leaders in the auto industry's transition towards technologically advanced battery EVs. (Jin10 Data)

[Shanghai Cyberspace Administration and Other Departments Guide Industry Associations to Formulate Auto Industry Compliance Convention] To encourage automakers and dealers to further strengthen self-discipline and continuously standardize the order of online information dissemination in the auto industry, the Shanghai Cyberspace Administration, together with the Shanghai Municipal Commission of Economy and Informatization, the Shanghai Municipal Commission of Commerce, the Shanghai Municipal Administration for Market Regulation, and the Cyberspace Security Detachment of the Shanghai Municipal Public Security Bureau, guided the Shanghai Automobile Sales Industry Association and the Shanghai Automotive Parts Industry Association to formulate the "Shanghai Auto Industry Marketing Behavior and Online Information Dissemination Compliance Convention". The "Compliance Convention" closely addresses the prominent risks of online marketing in the auto industry, clarifying self-discipline requirements around areas such as pricing behavior standards, online information dissemination standards, and sales and service conduct guidelines. It advocates that vehicle manufacturers, auto dealers, and related market entities adhere to the bottom line of compliant operations, working together to maintain a market order of fair competition and a clean and orderly cyberspace. (Jin10 Data APP)

[CAAM: Total Auto Goods Import and Export Value Reached $31.82 Billion in June, Up 35.5% YoY] According to data compiled by the China Association of Automobile Manufacturers from the General Administration of Customs, the total import and export value of auto goods in June 2026 was $31.82 billion, up 8.0% MoM and up 35.5% YoY. By component, the import value was $3.39 billion (down 6.1% MoM, down 18.7% YoY)， and the export value was $28.43 billion (up 10.0% MoM, up 47.2% YoY). From January to June 2026, the cumulative import and export value of national auto goods was $164.74 billion, up 25.5% YoY. By component, the import value was $19.25 billion (down 11.8% YoY)， and the export value was $145.49 billion (up 33.0% YoY). (Jin10 Data APP)

Data Source Statement: Except for publicly available information, all other data is processed by SMM based on public information and market communications, leveraging SMM's proprietary database models. It is for reference only and does not constitute decision-making advice.

SMM New Energy Research Team

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