[SMM Cobalt Morning Meeting Minutes] Weak Prices Persist as the Tug-of-War Between Sellers and Buyers Intensifies; Peak-Season Demand Still Needs to Be Observed

Refined cobalt:

On Monday this week, refined cobalt prices continued to consolidate on a subdued note. Supply side, mainstream smelters’ ex-works quotations held at 335,000 yuan/mt, while the spot-futures price spread in quotations from small and mid-sized smelters stayed in a range of a 6,000 yuan/mt discount to a 4,000 yuan/mt premium; traders’ mainstream quotations kept the spot-futures price spread at parity to a 10,000 yuan/mt premium. Demand side, downstream enterprises remained in the summer break period, maintaining only limited restocking for rigid demand, with a sluggish trading atmosphere. No clear new drivers emerged in the market; fundamentals saw relatively small changes, and prices continued to consolidate at lows. Overall, the market was still in the off-season, with limited demand support. In the short term, prices may continue to consolidate on a subdued note; attention should be paid to changes in downstream restocking pace after the summer break ends.

Intermediate products:

On Monday this week, the cobalt intermediate products market remained in a stalemate, with actual transactions still in a vacuum. Recently, some miners launched tenders with an indicative price of about $21-22/lb, but amid continued weakness in cobalt salt and refined cobalt, downstream players and traders’ psychological price level had pulled back to around $17-19/lb. With a wide price difference between buyers and sellers, tenders continued to fail. Facing the prolonged stalemate, some miners began considering a strategy shift—suspending direct sales of intermediate products and instead seeking toll manufacturers to process them into refined cobalt for sale, to avoid loss risks from direct sales at current low prices. In the short term, although miners were willing to hold prices firm, the lack of actual downstream purchasing support kept the market in a bargaining deadlock, and price stabilisation still depended on the materialisation of real transactions.

Cobalt sulphate:

On Monday this week, the cobalt sulphate market continued on a subdued note, with buyers’ and sellers’ psychological price levels further diverging and transactions struggling to scale up. Supply-side quotations diverged notably: primary smelters had not yet fully digested earlier high-priced raw materials, keeping quotations around 80,000 yuan/mt; however, MHP cobalt payables fell to around a 73% level, and spot costs had retreated to 70,000 yuan/mt, meaning cost support had in fact loosened. Recyclers showed strong willingness to sell, with mainstream quotations around a 93-95% discount to SMM’s low-end price; some enterprises under financial constraints continued to push prices lower in exchange for liquidity, dragging low-priced supply down to 79,000-70,000 yuan/mt. Some extreme low prices were heard at 66,000-67,000 yuan/mt, though mainly in sporadic spot orders. Demand remained weak: downstream order recovery was slow, purchases were limited to rigid demand, and some enquiries had been pressed down to 65,000 yuan/mt; however, with a wide price difference between buyers and sellers, actual deals were limited. In the short term, the cobalt sulphate market had yet to show a clear signal of stopping the fall, and price stabilisation still depended on a concentrated release of downstream restocking demand.

Cobalt chloride:

On Monday this week, reported prices in China’s cobalt chloride market showed no significant change. Last week’s sharp price drop was not driven by a sudden deterioration in supply-demand fundamentals in the short term, but rather reflected a rational return of previously inflated quotations to the market’s real transaction prices. Specifically, although earlier sellers’ quotations were somewhat inflated, they lacked support from real liquidity. When buyers with actual purchasing demand offered prices below current spot quotations, or even below cost, sellers holding pessimistic expectations—out of concern over further declines and for turnover considerations—proactively abandoned their original cost floor, facilitating some firm deals at the cost line or even below it and effectively squeezing out the earlier inflated premium. Of course, current low prices only reflected the stance of some enterprises, and not all enterprises had begun to cut quotations sharply. Looking ahead, it was believed that the likelihood of another sharp plunge in cobalt chloride prices in the short term was relatively low. Based on the above logic, the center had basically completed its shift from “inflated quotations” toward “actual costs” in the short term, and the market would subsequently enter a phase of hitting bottom.

Cobalt salt (Co3O4):

On Monday this week, Co3O4 prices held steady. Our actual quotation decline last week was larger than the market’s drop, mainly due to a proactive correction of the pricing system and a catch-up decline. This downtrend had continued from late May to date. Earlier, upstream and downstream players, based on expectations of weak stabilisation, hoped we would “decline slowly” to cushion the market impact of a sharp price fall, so we often chose small-range quotations to represent market prices. However, as the downcycle extended to nearly three months, the buffering effect of our slow decline on market pessimism gradually weakened, and the price spread between actual transaction prices and our earlier quotations widened. To align with actual deals, we proactively abandoned the previous slow-decline pace this week and moved quotations closer to the market’s real tradable range, resulting in a decline significantly larger than the market average. In the short term, Co3O4 price direction will remain closely anchored to changes in cobalt chloride prices.

Cobalt powder and others:

On Monday this week, the cobalt powder market still showed no improvement. Both buyers and sellers lacked willingness to take the initiative, and actual transactions remained sluggish. Although producers’ quotations stayed in the 420,000-440,000 yuan/mt range, the center of firm deals had gradually shifted toward the low end, with some transactions already dipping to 400,000-410,000 yuan/mt, and high-priced supply clearly lacking takers. Pressure in the trading segment increased, with frequent low-priced offers continuously pulling down the market’s psychological price level. Downstream, cemented carbide enterprises saw weak end-user orders; raw material consumption cycles lengthened, and purchases were mainly limited to picking up goods under long-term contracts, with very few spot-order restocking. Weakening cobalt carbonate prices further eroded cost support, overall market sentiment was pessimistic, and cobalt powder prices may continue to hit bottom on a weak note in the short term.

Ternary cathode precursor:

At the start of the week, ternary cathode precursor prices weakened. Today, nickel sulphate prices held steady, cobalt sulphate prices fell, and manganese sulphate prices held steady.

Discounts, for August and Q3 orders, given the previously high sulphate raw material costs, some producers were willing to raise discounts. Long-term contracts, some producers had already agreed annual long-term contract terms at the beginning of the year; for most producers, payables had not been raised, and downstream acceptance of payables increases for quarterly contracts was also weak. Except for some top-tier producers with certain bargaining power, most producers were overall stable versus Q2. Spot orders, as nickel and cobalt salt prices had been relatively weak recently, some downstream enterprises sought toll processing of raw materials or self-production, and August order payables were expected to weaken somewhat.

Production, top-tier producers’ export orders still performed well this month, with production schedules at a relatively high level; production utilisation at China’s top-tier producers also recovered notably, though some small and mid-sized producers still had relatively low production schedules due to the off-season.

Looking ahead, sulphate prices had yet to show a clear rebound, and pricing for subsequent new orders should focus on actual downstream demand during the peak season.

Ternary cathode material:

Early this week, ternary cathode material prices continued to rebound. Raw material side, nickel sulphate and manganese sulphate were temporarily stable, cobalt sulphate entered a phase of rapid decline, while lithium carbonate and lithium hydroxide continued to rebound, driving ternary cathode material prices higher. In terms of trading sentiment, cathode plants were basically on the sidelines, with weak purchase willingness for now. Discounts, there were no recent adjustments to nickel, cobalt, or lithium discounts. Demand, August orders increased steadily. Stockpiling for new car models for the traditional September-October peak season boosted domestic cathode order demand; outside China, especially in Europe, auto sales remained strong, continuing to boost ternary demand. Consumer market side, supply was basically stabilised via long-term contracts, spot-order transactions were relatively sluggish, and demand still showed no clear signs of recovery.

LCO:

On Monday this week, the LCO market remained relatively mediocre, with no major fluctuations. Supply side, downstream demand recovered slowly, and enterprises’ production and shipments had remained at relatively low levels since the beginning of the year. Price-cut strategies adopted to compete for market share had significantly squeezed profit margins, but shipments did not improve accordingly. Demand side, although battery cell manufacturers’ production schedules rebounded slightly, the growth did not transmit smoothly to the LCO segment; a rising share of downstream switching to ternary cathode material was also one of the key factors.

News:    

[National Bureau of Statistics (NBS): From January to July, production of 3D printing equipment, lithium-ion battery, and industrial robot products increased 52.3%, 40.2%, and 28.5% YoY, respectively] NBS data showed that from January to July, value-added industrial output of enterprises above designated size nationwide increased 5.3% YoY. By three major sectors, value-added of mining increased 2.5% YoY, manufacturing increased 5.6%, and electricity, heat, gas and water production and supply increased 5.4%. Value-added of equipment manufacturing increased 9.7% YoY, and value-added of high-tech manufacturing increased 13.8%, respectively 4.4 and 8.5 percentage points faster than overall value-added industrial output of enterprises above designated size. By ownership type, value-added of state-controlled enterprises increased 3.9% YoY; joint-stock enterprises increased 5.8%, foreign-funded and Hong Kong, Macao and Taiwan-invested enterprises increased 3.1%; private enterprises increased 4.5%. By product, production of 3D printing equipment, lithium-ion battery, and industrial robot products increased 52.3%, 40.2%, and 28.5% YoY, respectively. In July, value-added industrial output of enterprises above designated size nationwide increased 4.5% YoY and increased 0.11% MoM. In July, the manufacturing PMI was 49.2, and the index of expectations for enterprise production and business activities was 54.1. From January to June, industrial enterprises above designated size nationwide achieved total profits of 3,948 billion yuan, up 18.7% YoY.

[CATL Zeng Yuqun: Batteries that are not zero-carbon will be eliminated by the times] Zeng Yuqun, Chairman of CATL, said at the 2026 CATL Core Operations Carbon Neutrality Launch Conference that persisting in the carbon neutrality cause was for the sake of future generations, and that in the future, batteries that are not zero-carbon will be eliminated by the times. Zeng said climate change was a crisis that was truly happening—for example, Europe recently experienced its hottest June, with temperatures in Paris exceeding 40°C; and the geopolitical crisis that had continued over the past half year once again exposed the fragility and risks of the fossil energy system. Meanwhile, the development of industrialisation, electrification, and artificial intelligence also continued to push up global energy and electricity demand; the more electricity demand, the higher carbon emissions. (Jinshi Data APP)

[NBS spokesperson Wang Guanhua: The effectiveness of comprehensive efforts to address involution-style competition continues to emerge] Wang Guanhua, NBS spokesperson and Deputy Director-General of the Department of Comprehensive Statistics of the National Economy, said at a State Council Information Office press conference on August 17 that the effectiveness of comprehensive efforts to address involution-style competition continued to emerge. As capacity governance in key industry and comprehensive efforts to address involution-style competition continued to take effect, supply-demand relationships in some industries improved; in July, prices for lithium-ion battery manufacturing and PV equipment and components manufacturing rose 8.9% and 2.8% YoY, respectively. In the next stage, relevant departments will further expand domestic demand, optimise supply, focus on fostering and strengthening new momentum, comprehensively address involution-style competition, create a fair and competitive market environment, continue to ensure supply and stabilise prices, and promote stable operation of industrial products prices. (Xinhua Finance)

Data source statement: Except for public information, all other data were processed by SMM based on public information and market communication, relying on SMM’s internal database model, for reference only and not constituting decision-making advice.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

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Zhou Zhicheng 021-51666711

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