[SMM Cobalt Morning Meeting Summary] Weak Demand in the Metal Materials Chain, Falling Costs Intensify Price Pressure

Refined cobalt:

At the start of this week, the refined cobalt market moved sideways, with electronic trading prices fluctuating narrowly around the 300,000 yuan/mt level, with limited overall volatility. 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' firm pricing intentions continued to provide some support to the price floor. On the demand side, downstream enterprises gradually resumed procurement as summer breaks came to an end, but concerns over further price declines kept purchases cautious, with most activity limited to small rigid-demand orders and no bulk buying emerging 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 prices to move in either direction. Prices are expected to continue consolidating, with attention on the pace of downstream procurement recovery and whether concentrated restocking emerges.

Intermediate products:

At the start of this week, the cobalt intermediate product market remained in a stalemate, with the psychological price gap between upstream and downstream widening further. On the supply side, most miners maintained offer intentions near $19-20/lb; on the demand side, downstream purchase intentions were further lowered to near $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 buyers pushing for lower prices continues to intensify. With the price spread failing to narrow, substantive transactions are unlikely to materialize. Attention will focus on whether miners' pricing strategies show signs of easing.

Cobalt sulphate:

At the start of this week, cobalt sulphate prices remained stable, but pressure continued to build from weakening costs and sluggish demand. On the cost side, MHP cobalt payables continued to decline, with transactions concluded at 65% during the week, bringing immediate production costs down to approximately 60,000 yuan/mt and further weakening cost support. On the supply side, smelters' mainstream quotations were mainly anchored at three levels: 63,000 yuan/mt, 65,000 yuan/mt, and 68,000 yuan/mt, with differences primarily stemming from raw material types and varying shipment pressures among producers. 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 were not evident, with some ternary enterprises beginning to make inquiries but showing no willingness to conclude transactions; Co3O4 producers remained unwilling to purchase due to high inventories and sluggish demand. 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 a clear improvement in demand or supportive policy measures.

Cobalt chloride:

This week, cobalt chloride market prices edged down WoW, with transactions remaining sluggish. In terms of transaction structure, only a few scattered short-term orders were concluded in the market this week, with most cobalt chloride producers still shipping primarily under previously signed long-term contracts. Actual circulation was mainly supported by rigid demand, lacking incremental buying. On the supply side, against the backdrop of 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 toward September demand. Recently, due to rising costs of components such as memory chips, several major domestic smartphone brands have raised selling prices for models currently on sale, which may dampen end-user replacement demand and cast doubt on the strength of peak-season restocking. Overall, the cobalt chloride market is expected to remain bearish in the short term.

Cobalt salts (Co3O4):

This week, Co3O4 prices edged down WoW, with market trading remaining sluggish and no bulk transactions reported. Upstream cobalt chloride producers struggled to hold prices firm, with some enterprises lowering quotations, weakening cost support that is gradually transmitting to Co3O4. Top-tier Co3O4 producers generally adopted a wait-and-see stance, keeping quotations stable for now and showing no willingness to make proactive significant cuts. On the supply side, most producers maintained normal production pace, with no notable contraction in output. On the demand side, cathode material producers remained cautious in procurement, with few actual transactions concluded. Overall, if upstream quotations continue to decline and cost support weakens further, Co3O4 prices are expected to continue consolidating lower.

Cobalt powder and others:

At the start of this week, the cobalt powder market remained weak, with the price center continuing to shift lower. On the supply side, smelter quotations were further lowered, with current enterprise offers falling below the 400,000 yuan/mt mark. This round of declines stemmed partly from persistently weak demand and partly from lower upstream cobalt salt prices, with some cobalt carbonate producers lowering quotations to near 170,000 yuan/mt, significantly weakening cost support. On the demand side, although summer breaks have ended, market trading sentiment remained sluggish, with downstream enterprises showing no clear 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:

At the start of the week, ternary cathode precursor prices edged down slightly, with nickel sulphate prices declining today 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 annual contracts 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, with most producers keeping terms largely stable compared to Q2, except for some top-tier producers with certain bargaining power. 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 pricing for new orders will depend on actual downstream demand during the September-October peak season.

Ternary cathode material:

At the start of this week, ternary cathode material prices accelerated their decline. From the raw material side, nickel sulphate and cobalt sulphate prices remained stable, while lithium carbonate and lithium hydroxide prices extended last week's pullback with widening declines, dragging ternary cathode material prices lower. In terms of transactions, with lithium chemical prices at a relatively low stage, some battery cell manufacturers with restocking needs were expected to make certain purchases this week, potentially improving spot order trading sentiment. On the demand side, major 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 sales of some domestic high-end car models falling short of expectations. 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 halt new production in the near term, driving down domestic ternary cathode production schedules in September. On overseas demand, driven by expectations of export controls on lithium batteries being about to resume, high-nickel material orders remained at elevated levels recently.

LCO:

This week, LCO market prices remained largely stable, with overall fundamentals still weak and the peak season boost falling short of expectations. On the supply side, overall fluctuations were limited, with cathode enterprises maintaining low operating rates and a produce-based-on-sales strategy, keeping industry output relatively stable. On the demand side, performance was mediocre, with downstream procurement still primarily based on rigid demand with purchases made as needed, and no large-scale concentrated stockpiling emerging. The traditional September-October peak season driver did not materialize as expected, cooling market expectations for peak-season stockpiling. Inventory digestion across the industry chain remained slow, and the supply-demand pattern had yet to show substantive improvement.

Overall, at the current stage, cost side provides some support, and with downstream buyers making no further push for lower prices, LCO prices have gained some breathing room in the short term, with the market expected to consolidate and remain 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 risks of weakening again.

News:    

[SAMR: Deepen quality breakthroughs, overcome technical bottlenecks, and resolve a batch of "bottleneck" quality issues constraining power battery industry development] On the morning of September 4, the 2026 World Power Battery Conference special meeting on "Quality-Driven Supply Chain: Building a New Ecosystem for the Power Battery Industry" was held in Yibin, Sichuan Province. Liu Min, Chief Engineer of the State Administration for Market Regulation, attended the meeting and delivered a speech. The meeting noted that the global power battery industry competitive landscape is undergoing profound adjustments, with accelerated technological innovation and evident trends of industry chain and supply chain restructuring. It is necessary to deepen quality breakthroughs, overcome technical bottlenecks, and resolve a batch of "bottleneck" quality issues constraining power battery industry development. Enterprises should be encouraged to increase R&D investment, apply advanced quality management methods, ensure stable and reliable product performance, and enhance the resilience and security of industry and supply chains. It is necessary to strengthen standards leadership, solidify the industry foundation, promote alignment and mutual recognition of domestic and international standards, upgrade from passive compliance to proactive standard-setting, enhance the voice and influence of Chinese standards on the international stage, and drive high-quality development with high standards. It is necessary to jointly build an ecosystem and promote coordinated development, with government, enterprises, industry associations, and research institutions each fulfilling their roles and collaborating closely to build an open, inclusive, and mutually beneficial new industry ecosystem through multi-party efforts.

[Two ministries: Further regulate automakers' supplier payment term management] On September 7, the Ministry of Industry and Information Technology and the State Administration for Market Regulation jointly issued the "Notice on Promoting Automakers to Regulate Supplier Payment and Optimize Payment Term Management," the first national-level payment term management document targeting an industry sector and a key measure for industrial ecosystem development. The Notice addresses automakers' supplier payment issues and puts forward requirements in five areas. These include further regulating the starting point of payment terms. It clarifies that payment terms are calculated from the date when suppliers deliver goods, projects, or services and they pass acceptance inspection. Further regulating acceptance practices. It requires automakers to complete acceptance of general production materials such as parts within 3 working days after receiving goods, projects, or services, and within 5 working days for functional parts that require vehicle installation verification. Further regulating payment methods. Cash payments are encouraged, and suppliers should not be forced or indirectly forced to accept non-cash payment methods such as bank acceptance bills, commercial acceptance bills, or supply chain notes. (CCTV News)

[MIIT: For automakers with large accounts payable, deliberately extended payment terms, or frequent complaints, joint interviews with relevant departments will be conducted and rectification urged] A relevant official from the Ministry of Industry and Information Technology answered reporters' questions regarding the "Notice on Promoting Automakers to Regulate Supplier Payment and Optimize Payment Term Management." The MIIT relies on the "Online Problem (Suggestion) Reflection Window for Key Automakers' Payment Term Commitments" and leverages the role of media supervisors on industry payment term issues to accept problems and suggestions regarding payment term implementation, surveys, and evaluations. For automakers with large accounts payable, deliberately extended payment terms, or frequent complaints, joint interviews with relevant departments will be conducted and rectification urged. Through these measures, it is hoped that the enthusiasm of all parties will be fully stimulated, a sense of industry community will be forged, the resilience and security of industry and supply chains will be continuously enhanced, and the construction of a fair, just, honest, and mutually beneficial industry ecosystem will be accelerated. (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.

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