[SMM Analysis]China’s Cobalt Metal Output Continued to Rise in August, Demand Recovery Yet to Be Confirmed

According to an SMM survey, China’s cobalt metal output stood at 655 mt in August 2026, up 11.02% MoM but down 68.28% YoY. Output produced using cobalt chloride as feedstock accounted for approximately 56% of the total, while cobalt sulphate-based output accounted for around 44%.

The MoM increase was mainly driven by higher production at a leading smelter and the restart of a long-established producer that had previously suspended operations. The leading smelter contributed most of the monthly growth, while the restarted producer provided additional supply. However, some smaller producers reduced output amid cost and order pressures, partially offsetting the increase. China’s cobalt metal production remains concentrated among a small number of companies, with the largest producer accounting for nearly 70% of total output. Therefore, changes in the production schedules of individual producers can have a notable impact on monthly supply.

The cobalt metal spot market remained weak throughout August. The average SMM price for cobalt metal (Co≥99.8%) fell from around 345,500 yuan/mt at the beginning of the month to approximately 305,000 yuan/mt at month-end, representing a decline of about 11.7%. The monthly average stood at around 321,700 yuan/mt, down approximately 12.6% from July.

At the beginning of August, weaker overseas cobalt prices, together with declines in domestic cobalt intermediate and cobalt salt prices, weighed on market sentiment. Some cargo holders lowered their offers to secure sales, pushing spot transaction prices lower. In late August, news that an overseas miner was purchasing low-priced cobalt intermediates provided some support to market sentiment and prompted a brief price recovery. However, spot transactions remained dominated by purchases for immediate needs, limiting the extent of the rebound.

On the demand side, August remained a traditional off-season for cobalt metal consumption, with some downstream producers still on summer breaks. Purchases were mainly limited to long-term contract deliveries and small-volume restocking for immediate needs, while spot trading activity remained subdued. With demand yet to show a meaningful recovery, consecutive monthly increases in smelter output placed additional pressure on spot prices.

Nevertheless, China’s cobalt metal output remained significantly below the level recorded in the same period last year, with cumulative production in January-August falling by nearly 90% YoY. Therefore, although domestic supply is recovering at the margin, overall production remains at a relatively low level.

Looking ahead, with the leading producer expected to maintain a relatively high operating rate and the restarted smelter gradually stabilising production, China’s cobalt metal output is forecast to rise by around 10% MoM in September. Demand may improve as downstream producers return from summer breaks and begin seasonal restocking, but signs of concentrated purchasing have yet to emerge.

SMM expects cobalt metal prices to remain rangebound at low levels in the near term. Firmness in feedstock prices may provide some downside support, while continued growth in domestic output is likely to limit the upside. Market participants should closely monitor the actual strength of peak-season restocking, as well as changes in overseas cobalt feedstock prices and procurement activity.