【SMM Analysis】Cobalt Market Weekly Review: Pulse Rebound Fails to Reverse Weakness as Prices Grind Lower

This week (September 11-17), China's cobalt market remained weak, with cobalt metal, cobalt sulfate, cobalt chloride, cobalt tetroxide and cobalt powder all grinding lower, while the cobalt intermediates market fell into a lull with neither offers nor concluded deals. The pulse-like rebound in cobalt metal early in the week and its quick fizzle was the most telling episode of the week: the market's attempt to test a demand recovery was once again disproved by weak fundamentals.

Cobalt metal traded with fast-changing rhythms this week. Early in the week, some end-users and traders entered the market to buy, trading activity improved notably, and prices on the electronic platform rebounded to near 289,000 yuan/mt, with the fear-of-missing-out mentality attracting more buyers and lifting sentiment. However, from mid-week, as this round of concentrated buying was digested, market attention returned to fundamentals. With cobalt salt prices still falling and showing no sign of improvement, optimism faded and the electronic platform retreated to around 275,000 yuan/mt for range-bound trading. On the spot side, traders' basis offers held steady at premiums of 1,000-13,000 yuan/mt, while mainstream smelters further cut ex-works prices to 285,000 yuan/mt.

The raw material side showed a different form of weakness. The cobalt intermediates market was extremely quiet this week: miners rarely issued tenders, offers remained absent, and downstream players showed little interest in inquiries or purchases, leaving the market without either price guidance or deal verification. As time goes by, sales pressure on miners is gradually building, and the sustainability of their price-holding stance is being tested. Dragged down by the continued weakness of other cobalt products, intermediates prices are likely to edge lower with the market.

On the ternary chain, the negative feedback loop in the cobalt sulfate market kept running. With downstream purchases persistently weak, smelters kept cutting offers to move cargoes. Although most offers remained above 60,000 yuan/mt, actual transactions were difficult, and some recyclers offered low-priced cargoes at 57,000-58,000 yuan/mt. Falling prices pushed smelters into losses, weakening their appetite for feedstock and forcing raw material prices lower: the MHP cobalt payable saw no clear deals this week, but downstream buying intentions have fallen to around 55%, and the cobalt payable for LCO battery powder has dropped below 70%, corresponding to a spot cobalt sulfate production cost of only 52,000-54,000 yuan/mt. Weakening cost support in turn opened up more room for smelters to concede on prices. The cycle of "price cuts - losses - feedstock price pressure - lower costs - further price cuts" is unlikely to be broken in the near term.

The weakness in the consumer electronics chain was even more visible, with pressure transmitting bottom-up along the "end-user - cathode - cobalt salt" path. The earliest signal came from the terminal market: a leading smartphone brand's new model saw channel prices fall rapidly on its first day of sales, breaking below the launch price at debut - a further sign of weak end-user consumption, which kept procurement appetite at LCO cathode producers under pressure. The pressure passed through to cobalt tetroxide: prices edged lower this week, transactions were dominated by long-term contract orders with sporadic spot deals extremely rare, and producers' offers began to soften. Multiple producers have sharply cut output, with some even halting production entirely, noticeably shrinking industry supply. The contraction in the cobalt tetroxide segment directly dragged on upstream cobalt chloride: prices fell sharply this week, trading was dominated by offer quotations with few firm deals concluded, and the market showed a pattern of nominal prices without real transactions.

On the cemented carbide chain, cobalt powder's demand problem lies buried in inventories. Smelter offers concentrated at 380,000-390,000 yuan/mt this week, with only a few small-volume spot deals concluded near 400,000 yuan/mt. During the previous round of sustained increases in cobalt and tungsten prices, many cemented carbide producers built up large raw material inventories. As raw material and finished product prices both retreated, these high-cost inventories have left producers with relatively heavy losses, forcing them to slow production. Inventory drawdown cycles have lengthened, and new procurement has been repeatedly postponed.

Taking the week as a whole, the weakness across cobalt products showed different faces but pointed to the same root cause: a substantive demand recovery has yet to arrive. None of the three major downstream chains - ternary batteries, consumer electronics and cemented carbide - gave a positive signal. Pulse-like buying can only bring temporary rebounds; digesting high-cost inventories and repairing smelting losses both take time. For cobalt prices to exit the current downward channel, the market still needs a clear signal from the demand side.