[SMM Cobalt Morning Meeting Summary] Weak Demand Drags Down Industry Prices, Market Continues to Consolidate on a Weak Note Ahead of the Holiday

Refined cobalt:

The refined cobalt market held steady at the start of this week. Trader quotes for spot-futures price spreads remained stable at premiums of 1,000-13,000 yuan/mt, mainstream smelter Ex-works prices held at 285,000 yuan/mt, and downstream demand showed no notable change, with just-in-time procurement maintained. Pulsed purchasing volume can only bring temporary rebounds and is unlikely to reverse the underlying weak demand; until cobalt salt prices stop falling and downstream restocking becomes sustained, refined cobalt prices do not yet have the conditions to break out of consolidation at lows.

Intermediate products:

Trading in the cobalt intermediate product market remained sluggish at the start of this week. Miners rarely conducted tenders, and market quotes remained absent; downstream enterprises also showed little willingness to inquire or purchase. The market lacked both price guidance and transaction confirmation, with an overall strong wait-and-see sentiment. Notably, as time passes, sales pressure on miners is gradually accumulating, and the sustainability of their hold prices firm stance is facing a test. Against the backdrop of continued weakness in other cobalt product prices, the price center of intermediate products may slowly drift lower with the market, and the resolution of the market impasse still depends on marginal changes in miners' selling strategies.

Cobalt sulphate:

Cobalt sulphate prices briefly stabilized at the start of this week, but the overall trend remained weak. This round of declines originated on the demand side: downstream purchasing remained persistently weak, and smelters could only keep lowering quotes to achieve shipments. Although most enterprises still maintained cobalt sulphate quotes above 60,000 yuan/mt this week, actual transactions were very difficult, with some recyclers offering low-priced cargo at 57,000-58,000 yuan/mt. The price decline pushed the smelting segment into losses, weakening enterprises' willingness to purchase raw materials, which in turn forced raw material prices down: although there were no confirmed transactions for MHP cobalt payables during the week, downstream indicative bids had fallen to around 55%, and if transactions were concluded at this level, the spot production cost of cobalt sulphate would fall to just over 50,000 yuan/mt; on the recycling side, LCO battery black mass payables had fallen below 70, corresponding to a spot cost of only 52,000-54,000 yuan/mt for cobalt sulphate. The further weakening of cost support, in turn, opened new room for smelters to cut prices for shipments. Before any substantive improvement in demand emerges, the cycle of "price cuts—losses—raw material price suppression—cost declines—further price cuts" is expected to continue dominating the direction of the cobalt sulphate market.

Cobalt chloride:

Cobalt chloride prices edged down this week, with market transactions remaining sluggish. Trading was dominated by offers, with few actual deals concluded. With the Mid-Autumn Festival and National Day holidays approaching, upstream and downstream segments along the industry chain are gradually entering the pre-holiday wrap-up phase, and market activity has further declined. On the supply side, smelter inventories remained high, and destocking remained the main theme, but shipment progress was slow amid scarce transactions. On the demand side, downstream Co3O4 enterprises generally had no intention of restocking before the holiday, with most planning to postpone stockpiling until after the National Day holiday, leaving pre-holiday purchasing essentially at a standstill. From a timing perspective, September is already more than halfway through, and the "September peak season" has clearly fallen short of expectations, with market expectations for current-month demand skewed weak. Overall, cobalt chloride prices are expected to remain in the doldrums in the short term, and a substantive improvement in demand may have to wait until November.

Cobalt salts (Co3O4):

Co3O4 prices edged down this week, with market transactions sluggish and few actual spot buyout deals concluded; current transactions were mostly based on processing arrangements. On the supply side, producers maintained low operating rates and had no intention of raising utilization before the holiday given the absence of demand. On the demand side, LCO cathode plants showed low willingness to stockpile before the holiday, with purchasing mostly wait-and-see. In terms of production pace, October will be affected by the National Day holiday, and with a post-holiday production resumption ramp-up period of about two weeks, effective production time for the month will be significantly compressed, making it difficult for concentrated procurement demand to form at scale. Overall, Co3O4 prices are expected to consolidate on a subdued note in the short term, with market attention gradually shifting to demand realization in November.

Cobalt powder and others:

Cobalt powder market transactions remained sluggish at the start of this week, with smelter quotes concentrated around 380,000-390,000 yuan/mt and only a small volume of spot orders transacted near 400,000 yuan/mt. Downstream purchasing has yet to start, and the crux lies in earlier stockpiling behavior: during the previous period of sustained cobalt and tungsten price increases, many alloy enterprises purchased large quantities of raw materials. As both raw material and finished product prices have since pulled back, high-priced inventories have pushed these enterprises into severe losses, forcing them to slow their production pace. The consumption cycle for existing inventories has been further extended, and new purchases have been repeatedly postponed. For the cobalt powder market, the timing of demand recovery depends not only on the recovery of end-use orders but also on the pace of destocking of downstream high-priced inventories. Until then, the sluggish trading environment is unlikely to fundamentally improve.

Ternary cathode precursor:

At the start of the week, ternary cathode precursor prices weakened. Today, manganese sulphate and nickel sulphate prices moved lower, while cobalt sulphate prices held steady.

On discounts, for October and Q4 orders, some producers still intend to hold prices firm due to the higher cost of sulphate raw materials earlier. On long-term contracts, some producers had already agreed on annual contracts at the beginning of the year, and most producers have not yet raised their payables. Downstream acceptance of payables increases for quarterly orders also remained weak. Except for some top-tier producers with a certain degree of pricing power, most producers are expected to remain broadly stable with Q3. On spot orders, given the relatively weak performance of nickel and cobalt salt prices recently, combined with soft downstream demand for some producers, October order payables are expected to decline.

On production, top-tier producers continued to see strong export orders this month, with production schedules at relatively high levels. However, some domestic top-tier producers reduced their willingness to stockpile and lowered operating rates due to end-use demand falling short of expectations and high prices for key raw materials. Overall, production schedules showed a downward trend this month.

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:

At the start of this week, the decline in ternary cathode material prices slowed. From the raw material side, nickel sulphate prices weakened slightly, cobalt sulphate prices stabilized after declines, and lithium carbonate and lithium hydroxide prices extended their rebound with modest gains from lows, helping ternary cathode material prices stabilize overall. On transactions, with the National Day holiday approaching, some producers had already completed order signing and stockpiling in the previous two weeks and are currently in the delivery phase. There was no new order signing demand this week, and market sentiment turned mediocre. On demand, the EV market continued the sluggish sentiment seen since the beginning of the month, with end-use demand persistently weakening and no signs of rebound. Cathode plants mainly consumed inventories this month, and consumer market demand was also relatively mediocre.

LCO:

This week, domestic LCO market prices pulled back overall, with the industry's traditional "September peak season" boost failing to materialize and overall fundamentals under pressure. The cost side was the core drag, as upstream Co3O4 prices moved lower, directly compressing cost support for LCO and driving product prices down. On the supply side, domestic cathode enterprises maintained a cautious strategy of producing based on sales, with overall industry output showing relatively small fluctuations and market supply remaining relatively stable, without notable supply-demand mismatch pressure. The demand side showed clear weakness, with the peak season boost falling well short of market expectations. Downstream end-use market stockpiling willingness was low, with purchasing maintained entirely on a just-in-time procurement basis throughout, and end-use demand lacked effective upward momentum. The current pace of inventory digestion across the industry chain remained relatively slow, and the supply-demand pattern stayed weak without substantive improvement. Although downstream had no active push for lower prices, this could not offset the dual bearish impact of falling costs and weak demand. Overall, the weak tone for the short-term LCO market has been set, with a clear drift lower in prices. Attention should focus on downstream end-use stockpiling progress in late September. If end-use demand remains persistently weak and the peak season continues to be absent, LCO market prices still face the risk of further weakening.

News:    

[GFEX adjusts price limit ranges and trading margin standards for relevant futures contracts] GFEX announced that, after study, the exchange will adjust the price limit ranges and trading margin standards for various futures contracts before and after the 2026 National Day holiday as follows: Effective from settlement on September 29, 2026 (Tuesday), 1. the price limit range for silicon metal futures contracts will be adjusted to 10%, speculative trading margin standard to 12%, and hedging margin standard to 11%; 2. the price limit range for polysilicon futures contracts will be adjusted to 11%, speculative trading margin standard to 15%, and hedging margin standard to 15%; 3. the price limit range for lithium carbonate futures contracts will be adjusted to 15%, speculative trading margin standard to 17%, and hedging margin standard to 16%; 4. the price limit range for platinum and palladium futures contracts will be adjusted to 16%, and speculative and hedging margin standards will be adjusted to 18%.

[Lanjing New Energy's new-type cylindrical battery project signed and launched in Wuxi] According to Wuxi Release, on September 20, the Lanjing New Energy new-type cylindrical battery project with a total investment of 5.5 billion yuan was signed and launched in Wuxi. Lanjing New Energy is one of the earliest enterprises in China to achieve mass production of all-tab large cylindrical batteries. The company signed an agreement with Yixing to implement the Lanjing New Energy new-type cylindrical battery project, which will better drive coordinated and clustered development across the industry chain, including anode and cathode materials, separators, electrolytes, battery structural components, battery cell equipment, and PACK integration. (Jin10 Data)

[CAAM: In August 2026, Chinese-brand passenger vehicle sales totaled 1.853 million units, up 5.6% MoM] According to CAAM statistical analysis, in August 2026, Chinese-brand passenger vehicle sales totaled 1.853 million units, up 5.6% MoM and up 4.9% YoY, accounting for 77.8% of total passenger vehicle sales, with market share up 8.2 percentage points YoY. From January to August 2026, Chinese-brand passenger vehicle sales totaled 12.747 million units, up 0.8% YoY, accounting for 73.4% of total passenger vehicle sales, with market share up 4.6 percentage points YoY. (Jin10 Data)

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 investment advice.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Lin Ziya 86-2151666902

Feng Disheng 021-51666714

Lyu Yanlin 021-20707875

Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

Wang Jie 021-51595902

Zhang Haohan 021-51666752

Chen Bolin 021-51666836

Xu Mengqi 021-20707868