[SMM Cobalt Morning Meeting Summary] Peak Season Demand Falls Short of Expectations, Industry Chain Competition Continues to Intensify

Refined cobalt:

This week, the refined cobalt market consolidated, with electronic trading prices fluctuating narrowly around 300,000 yuan/mt, and overall volatility was limited. On the supply side, mainstream smelters maintained EXW prices at 310,000 yuan/mt, while trader quotations held steady at a spot-futures price spread of a premium of 1,000-13,000 yuan/mt. Spot supply remained stable, and miners' willingness to hold prices firm continued to provide some support to the price floor. On the demand side, downstream enterprises gradually resumed operations after the summer break, and purchasing activity began to recover. However, concerns over further price declines kept buying sentiment cautious, with purchases mainly limited to small volumes for immediate needs, and no bulk procurement emerged in the market. In the short term, supply-side price support and slower-than-expected demand recovery are offsetting each other, leaving limited room for price movement in either direction. Prices are expected to continue moving sideways, with attention on the pace of downstream purchasing recovery and whether concentrated restocking will emerge.

Intermediate products:

This week, the cobalt intermediate products market remained in a stalemate, with the psychological price gap between upstream and downstream widening further. On the supply side, most miners maintained their quotation intentions near $19-20/lb; on the demand side, downstream purchase intentions were further lowered to around $15-16/lb. The divergence between buyers and sellers deepened, making transactions difficult to advance, and recent tenders largely failed. In the short term, the tug-of-war between miners holding prices firm and downstream pushing for lower prices is intensifying. With the price spread failing to narrow, substantive transactions are unlikely to materialize. Attention will be on whether miners' quotation strategies show signs of loosening.

Cobalt sulphate:

This week, cobalt sulphate prices remained stable, but pressure from weakening costs and sluggish demand continued to build. On the cost side, MHP cobalt payables continued to decline, with transactions concluded at 65% during the week, bringing spot production costs down to approximately 60,000 yuan/mt, further weakening cost support. On the supply side, mainstream smelter quotations were mainly anchored at three levels: 63,000 yuan/mt, 65,000 yuan/mt, and 68,000 yuan/mt, with differences mainly stemming from raw material types and varying shipment pressures among enterprises. In the trading segment, some traders, concerned about further price declines, were considering selling old cobalt sulphate inventory at low prices near 61,000-62,000 yuan/mt. On the demand side, this year's peak season characteristics have not been evident. Some ternary enterprises began making inquiries, but there was no proactive intention to conclude transactions; Co3O4 enterprises, constrained by high inventories and sluggish demand, still showed no purchase willingness. In the short term, although current market prices have not yet declined, under multiple pressures including persistently weakening raw material costs, low-price selling in the trading segment, and sluggish downstream demand, prices are likely to continue drifting lower in September-October, with market confidence recovery still dependent on significant demand improvement or supportive policies.

Cobalt chloride:

This week, cobalt chloride prices edged down WoW, with transactions remaining sluggish. In terms of transaction structure, only a few scattered short-term orders were concluded this week. Most cobalt chloride producers continued to ship mainly under previously signed long-term contracts, with actual circulation supported primarily by immediate demand and lacking incremental buying. On the supply side, amid persistently weak market sentiment and insufficient downstream purchase willingness, several upstream producers took the opportunity to halt production for maintenance, proactively reducing output to ease inventory and loss pressures. On the demand side, downstream buying sentiment was negative, with most taking a wait-and-see or even bearish stance on September demand. Recently, due to rising costs of memory chips and other components, several mainstream domestic mobile phone brands have raised prices of current models, which may suppress end-user replacement demand and cast doubt on peak-season restocking intensity. Overall, the cobalt chloride market is expected to remain bearish in the short term.

Cobalt salts (Co3O4):

This week, Co3O4 prices were largely flat, with sluggish market trading and no actual transactions reported. Although upstream cobalt chloride prices continued their slow decline, the easing on the cost side has not yet effectively transmitted to Co3O4. Top-tier players generally maintained a wait-and-see stance, keeping quotations stable with no proactive intention to lower prices. On the supply side, most producers maintained normal production pace, with no significant output contraction observed. On the demand side, cathode material plants remained cautious in purchasing, with few actual orders concluded. Overall, in the absence of effective transaction guidance, Co3O4 prices are expected to continue consolidating in a narrow range in the short term.

Cobalt powder and others:

This week, the cobalt powder market remained weak, with the price center continuing to shift downward. On the supply side, smelter quotations were further lowered, with current enterprise quotations falling below the 400,000 yuan/mt mark. This round of decline was driven by persistently weak demand on one hand, and dragged down by lower upstream cobalt salt prices on the other, with some cobalt carbonate producers lowering quotations to around 170,000 yuan/mt, significantly weakening cost support. On the demand side, although the summer break has ended, market trading sentiment remained sluggish, with downstream enterprises showing no significant purchase willingness and spot order procurement remaining sporadic. In the short term, the dual pressures of declining costs and weak demand have yet to ease, and cobalt powder prices are likely to continue their weak trend of hitting bottom, with market stabilization still dependent on a substantive recovery in downstream purchase willingness.

Ternary cathode precursor:

This week, ternary cathode precursor prices weakened, with nickel sulphate prices declining during the week, while cobalt sulphate and manganese sulphate prices remained stable.

Regarding discounts, for September and Q3 orders, some producers still showed willingness to hold prices firm due to higher sulphate raw material costs earlier in the period. For long-term contracts, some producers had already agreed on terms at the beginning of the year, and most producers had not yet raised their coefficients. Downstream acceptance of coefficient increases for quarterly orders also remained weak. Except for some top-tier players with certain bargaining power, most producers kept coefficients largely stable compared to Q2. For spot orders, given the relatively weak performance of nickel and cobalt salt prices recently, some downstream enterprises sought raw material toll processing or increased in-house production, keeping September order coefficients under pressure.

On the production side, top-tier producers continued to see strong export orders this month, with production schedules at relatively high levels. Some domestic top-tier producers had slight expectations of reduced medium-nickel orders, while other small and medium-sized producers maintained relatively low production schedules due to the off-season.

Looking ahead, sulphate prices have yet to show a clear rebound, and new order prices will depend on actual downstream demand during the September-October peak season.

Ternary cathode material:

This week, ternary cathode material prices continued to show small fluctuations. From the raw material side, nickel sulphate prices remained weak, cobalt sulphate prices stayed stable, and lithium carbonate and lithium hydroxide prices pulled back continuously after sharp gains early in the week. Lithium chemicals remained in a phase of significant consolidation, with producers still cautious in placing orders. In terms of transactions, due to wild swings in raw material prices, battery cell manufacturers' restocking willingness remained weak, and market trading was relatively sluggish, dominated by the execution of existing orders. On the demand side, leading ternary battery cell manufacturers recently made significant downward adjustments to September and Q4 orders, with medium- and high-nickel material orders most affected, mainly due to lower-than-expected sales of some domestic high-end car models. With ample raw material inventories, battery cell manufacturers proactively slowed their cargo pick-up pace; coupled with accumulated finished product inventories at cathode plants earlier in the period, cathode plants are likely to focus on consuming inventories and temporarily slow new production, driving down domestic ternary cathode production schedules in September. On the overseas demand side, driven by expectations of the imminent resumption of lithium battery export controls, high-nickel material orders remained at elevated levels. In the consumer market, demand remained mediocre, with signs of further slight pullback; the official resumption of lithium battery export tax rebates also exerted some restraint on short-term delivery pace.

LCO:

This week, LCO market prices remained stable, with overall fundamentals still weak and the peak season boost falling short of expectations. Supply-side fluctuations were limited overall, with cathode enterprises maintaining low operating rates and a produce-based-on-sales strategy, keeping industry output relatively stable. Demand-side performance was mediocre, with downstream purchases still mainly based on immediate needs and small-volume replenishment, and no large-scale concentrated stockpiling emerged. The traditional September-October peak season driver has not materialized as expected, and market expectations for peak-season stockpiling have cooled. Inventory digestion across the industry chain remained slow, and the supply-demand pattern has yet to show substantive improvement.

Overall, at the current stage, cost support provides some floor, and with no further downstream push for lower prices, LCO prices have gained breathing room in the short term, with the market consolidating and largely stable. However, end-use demand lacks upward momentum, and if September end-user stockpiling continues to fall short of expectations, the market still faces potential risk of renewed weakness.

News:    

[MIIT Xiong Jijun: Support all parties to concentrate on breakthroughs in all-solid-state battery, sodium-ion battery, and lithium metal battery technologies] Vice Minister of Industry and Information Technology Xiong Jijun stated that China will further strengthen technological innovation, support upstream and downstream forces to concentrate on breakthroughs in all-solid-state battery, sodium-ion battery, and lithium metal battery technologies, accelerate the R&D and application of new material systems and new process structures, and collaboratively improve the energy density, safety, and durability of power batteries. China will further strengthen standards leadership, accelerate the formulation of standards for power battery safety performance, cycle life, carbon footprint, and recycling, actively promote alignment of the standards system with international standards, strengthen verification of implementation and enforcement, and use standards upgrades to lead quality improvement and competitiveness enhancement. (Jin10 Data APP)

[Minmetals New Energy: Company initiates mass production preparations for 4th-generation LFP power battery first-firing products] On September 3, Minmetals New Energy stated at the 2026 H1 new energy industry collective results briefing on the STAR Market that the company's 4th-generation LFP power battery first-firing products have passed customer evaluation and entered mass production preparation, while 4th-generation and 4.5-generation second-firing products have completed trial production and are undergoing large-scale evaluation by multiple customers. The hundred-tonne pilot production line for sodium-ion battery materials is planned to be completed and put into operation within the year. (Jin10 Data APP)

[CATL Robin Zeng: New car launches compete on speed, specifications, and price, but battery quality should not be sacrificed] CATL Chairman Robin Zeng stated that in H1 this year, domestic NEV sales exceeded 7.4 million units, with over 600 new models launched, averaging nearly three per day. Everyone is competing on speed, specifications, and price, with development cycles getting shorter and shorter. He noted that power batteries require extremely high precision and have very low fault tolerance. In mass production, all small problems are magnified exponentially, so every process and every parameter must be strictly controlled at the design stage, anomalies must be identified in advance, and there must be zero tolerance for quality issues. (Jin10 Data APP)

Data source statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM's internal database models, and are for reference only and do not constitute decision-making advice.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

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Lyu Yanlin 021-20707875

Zhou Zhicheng 021-51666711

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