[SMM Cobalt Morning Meeting Summary] Weak Demand Combined with Lower Costs, Industry Chain Price Center Continues to Decline

Refined cobalt:

This week, the refined cobalt market broke below key support, with e-futures prices falling rapidly from mid-week, dropping from around 300,000 yuan/mt to below 280,000 yuan/mt, showing clear market weakness. No clear bearish news emerged this week; the rapid price decline was mainly driven by capital flows: in the early stage of the decline, futures briefly showed a decline with rising open interest, before shifting to a decline with falling open interest. In the spot market, mainstream smelters lowered their EXW prices to 295,000 yuan/mt; traders' quoted spot-futures price spreads changed little, remaining at premiums of 1,000-13,000 yuan/mt, with sales profits mainly reliant on hedging spreads between futures contracts and spot-futures price spreads. On the demand side, the market remained sluggish overall, with confidence clearly insufficient. Downstream enterprises continued to focus on restocking only for immediate needs, adopting a cautious purchasing stance, making it difficult for trading volume to expand. In the short term, the capital-driven decline has yet to show clear signs of stabilization, and with weak demand-side support, refined cobalt prices are likely to remain on a soft trajectory.

Intermediate products:

This week, cobalt intermediate product prices fell sharply, with signs of the stalemate beginning to ease. On the supply side, top-tier miners continued to hold prices firm, but downstream purchase intentions remained low, and the gap between the two sides could not be bridged, making miner tenders difficult to conclude. Notably, two suspected deals emerged during the week: first, an overseas trader reportedly sold a small volume at around $15/lb early in the week, though market uncertainty remained over whether the final buyer was a domestic or overseas enterprise; second, mid-week market talk suggested a domestic trader sold intermediate products in bulk at around $17/lb. Against the backdrop of a prolonged absence of concluded deals, the emergence of these low-priced cargoes further pressured market sentiment. In the short term, the tug-of-war between miners holding prices firm and low-priced market transactions continues. If low-priced deals are gradually confirmed, the price center for intermediate products may shift further downward, with attention on whether miners' firm pricing stance begins to waver.

Cobalt sulphate:

This week, cobalt sulphate prices broke below previous support, with market weakness deepening further. On the cost side, for primary feedstock, MHP cobalt payables remained at low levels, with spot production costs hovering around 60,000 yuan/mt; for recycled feedstock, current ternary battery cobalt payables stood at 70-72, LCO battery cobalt payables at 69-71, ternary electrode cobalt payables at 74.5-76, and LCO electrode cobalt payables at 72-74. Considering cobalt alone, spot costs were only 56,000-58,000 yuan/mt, with cost support continuing to weaken overall, and the cost advantages of recycled material also leaving room for low-priced selling. On the supply side, a few recycling enterprises sold at low prices under cash flow pressure, with the lowest quotes already down to around 60,000 yuan/mt; affected by this low-priced competition, mainstream smelters lowered their quotes in tandem, with enterprises willing to sell currently quoting 62,000-63,000 yuan/mt, while a few with weaker willingness to sell maintained quotes at 65,000-70,000 yuan/mt or suspended quoting. On the demand side, downstream demand has shown no signs of improvement since September, and in ternary, there were even rumors that top-tier battery cell manufacturers would significantly cut volumes in September, further weakening demand expectations; against the backdrop of some smelters cutting prices to sell, downstream purchase intentions have been lowered to around 60,000 yuan/mt. In the short term, bearish factors on both supply and demand sides continue to build, and the price center may keep moving lower, with attention on the sustainability of low-priced selling and changes in battery cell manufacturers' production schedules.

Cobalt chloride:

This week, cobalt chloride prices continued to slide, with market trading remaining sluggish. Transactions were mainly quote-driven, with actual trading volume extremely limited and sporadic spot orders also very scarce, presenting an overall pattern of quoted prices without corresponding deals. On the cost side, although there is still some profit margin in current production, profits have not translated into effective selling momentum amid the absence of demand. On the supply side, producers' finished product inventories remained high, and with downstream purchases lacking momentum, destocking progressed slowly, making it difficult to substantially ease selling pressure. The demand side was even weaker, with maintenance-related production cuts at Co3O4 producers expanding further recently, driven both by slow digestion of their own finished products and by widespread expectations that September consumption will be weaker than August. The proactive contraction in downstream operating rates further squeezed actual purchasing space for cobalt chloride. Overall, with demand continuing to weaken and inventory digestion still requiring time, cobalt chloride prices are expected to maintain a slow decline in the short term.

Cobalt salts (Co3O4):

This week, Co3O4 prices fell significantly, mainly due to weak demand from downstream LCO cathode plants, compounded by high finished product inventories, with the overall market in a destocking phase. On the supply side, industry-wide maintenance and production suspensions continued to expand, with producers proactively lowering operating rates to control output pace amid insufficient orders. On the demand side, despite expectations of new phone launches and "Double 11" shopping festival stockpiling, current downstream feedback suggests limited boost to actual purchases, with the market generally believing that substantive demand improvement may not arrive until October. In the short term, Co3O4 prices are expected to remain flat or move sideways.

Cobalt powder and others:

This week, the cobalt powder market remained lackluster, with the price center shifting lower along with other cobalt products. Orders from large downstream cemented carbide enterprises have yet to recover, with enterprises still digesting previously accumulated inventories, and purchasing demand releasing slowly, keeping market transactions sluggish. Constrained by persistently weak demand, smelters continued to lower quotes, with the low end of quotes now down to around 385,000-390,000 yuan/mt; the simultaneous weakening of upstream cobalt salt prices also left cobalt powder with little cost-side support. In the short term, until downstream inventories are fully digested, the cobalt powder market is unlikely to see substantive demand boost, and prices may continue a gradual decline toward the bottom, with attention on the pace of order recovery at cemented carbide enterprises.

Ternary cathode precursor:

This week, ternary cathode precursor prices weakened, with cobalt sulphate and nickel sulphate prices falling during the week, while manganese sulphate prices held steady.

On discounts, for September and Q4 orders, some producers still showed willingness to hold prices firm due to higher earlier sulphate raw material costs. On long-term contracts, some producers' annual contracts were already agreed at the start of the year, and most producers have yet to see payables raised; downstream acceptance of payables increases for quarterly contracts also remained weak. Except for some top-tier producers with certain pricing power, most producers are expected to remain broadly flat with Q2. On spot orders, with nickel and cobalt salt prices relatively weak recently, compounded by weak downstream demand for some producers, September order payables remained under pressure.

On production, top-tier producers' export orders remained strong this month, with production schedules at high levels, but some domestic top-tier producers saw reduced willingness to stockpile and lower operating rates due to end-use demand falling short of expectations. Overall, this month's production schedule showed a downward trend.

Looking ahead, sulphate prices have yet to show a clear rebound, and future new order prices will depend on actual downstream demand in Q4.

Ternary cathode material:

This week, ternary cathode material prices continued to decline. From the raw material side, nickel sulphate prices edged lower, cobalt sulphate prices fell notably again, and lithium carbonate and lithium hydroxide prices narrowed their declines after a rapid drop early in the week, showing signs of stabilizing at low levels, collectively dragging ternary cathode material prices lower. On transactions, with lithium chemical prices already at a phased low, some battery cell manufacturers with restocking needs made a certain volume of purchases this week, and sentiment for spot orders may recover. On demand, top-tier ternary battery cell manufacturers recently made significant downward adjustments to September and Q4 orders, with mid- and high-nickel material orders most affected, mainly due to sales of some high-end domestic car models falling short of expectations. With ample raw material inventories, battery cell manufacturers proactively slowed their pace of picking up goods; combined with cathode plants having accumulated some finished product inventories earlier, cathode plants are likely to focus on consuming inventories and pause new production in the near term, driving September domestic ternary cathode production schedules downward. On overseas demand, affected by expectations that lithium battery export controls will soon be restored, high-nickel material orders remained at high levels recently.

LCO:

This week, domestic LCO market prices pulled back overall, with the industry's traditional "September peak season" failing to materialize, and overall fundamentals under pressure. The cost side was the core drag, with upstream Co3O4 prices falling, directly compressing cost support for LCO and driving product prices down accordingly. On the supply side, domestic cathode enterprises maintained a cautious strategy of producing based on sales, with overall industry output fluctuating relatively little and market supply relatively stable, without obvious supply-demand mismatch pressure. The demand side showed clear weakness, with the peak season boost falling far short of market expectations, downstream end-use market stockpiling willingness remaining low, and purchases maintained throughout only on a just-in-time basis, lacking effective upward driving force from end-use demand. The current pace of inventory digestion across the industry chain remained slow overall, with the supply-demand pattern staying weak without substantive improvement. Although downstream has not actively pushed for lower prices, this cannot offset the dual bearish impact of falling costs and weak demand. Overall, the short-term LCO market weakness is firmly established, with prices clearly drifting lower. Attention should focus on end-use stockpiling follow-through in mid-to-late September; if end-use demand remains weak and the peak season continues to be absent, LCO market prices still face risks of further weakening.

News:    

[BYD: Flash-charging car model orders are full, second-generation blade battery monthly capacity to ramp up gradually] BYD stated in an investor relations event that the second-generation blade battery is the core foundation of its flash-charging car models. Entering H2 2026, monthly capacity for the second-generation blade battery will ramp up gradually to meet end-use demand; currently, flash-charging car model orders are full, and the company is steadily advancing production line expansion to match end-use order demand. (Jin10 Data APP)

[China's August NEV production and sales up 18.9% and 17.8% YoY respectively] CAAM released August auto production and sales data today, showing that China's NEV dominance continued to consolidate, becoming a key growth driver stabilizing the industry. The latest data shows that the monthly sales share of NEVs hit a new high. In August, NEV production and sales reached 1.653 million and 1.643 million units, up 18.9% and 17.8% YoY respectively, with NEV sales accounting for 60.6% of total new vehicle sales. In exports, China's August auto exports reached 1.01 million units, up 65.3% YoY, with monthly exports exceeding 1 million units for three consecutive months. Among these, NEV exports were 526,000 units, up 1.3x YoY. In terms of export structure, NEV exports have accounted for over 50% of total auto exports for three consecutive months. (CCTV News) (Jin10 Data APP)

[Chinese Academy of Sciences: Breakthrough in low-temperature lithium-ion capacitor electrolyte, energy density reaches 8.9x that of conventional electrolyte] Lithium-ion capacitors have significant application potential in low-temperature, high-power energy storage scenarios. Recently, a research team led by researcher Ma Yanwei at the Institute of Electrical Engineering, Chinese Academy of Sciences, proposed a "solvation shielding-breaking electrolyte" design strategy. Research shows that all-carbon lithium-ion capacitors prepared with this solvation shielding-breaking electrolyte maintained excellent energy output performance at -40°C, achieving an energy density of 106.8 Wh/kg based on electrode material mass, 8.9 times that of conventional carbonate-based electrolytes. This research breaks through the bottleneck of sluggish interfacial reaction kinetics in low-temperature lithium-ion capacitors caused by strong solvation shielding, providing a new approach for developing low-temperature, high-energy, high-stability lithium-ion capacitors. (Wall Street CN)

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