【SMM Analysis：Spot inventory is high; China cobalt sulphate production in July decreased MoM】

In June, China's cobalt sulphate production was 5,646 mt in metal content, down 8% MoM and 25% YoY. The main reasons for the production decrease in June were: the significant decline in downstream ternary cathode precursor demand led to reduced downstream production, weakening the demand for cobalt sulphate. Additionally, due to high market inventory and continuous decline in spot prices, the losses at cobalt sulphate refineries intensified, resulting in significant production cuts.

In July, although downstream production is expected to increase, the demand will be more concentrated on high-nickel directions, leading to limited recovery in cobalt demand. Therefore, the production is expected to be around 5,691 mt in metal content, with little MoM fluctuation and a 32% YoY decrease.