[SMM Cobalt Morning Meeting Summary] Downstream Producers of Refined Cobalt Inquired Less, Actual Transactions Were Low

Refined Cobalt:

At the beginning of this week, the spot price of refined cobalt saw a slight increase. In terms of supply, smelters generally adopted a strategy to stand firm on quotes and suspended quotations due to the potential extension of DRC's ban on cobalt product exports. From the demand side, some producers had already completed their procurement, leading to fewer inquiries from downstream buyers and lower actual transactions. However, as the month-end approached, traders' selling for delivery warehouse transfer came to an end, and with the stimulation of news, speculative sentiment in the refined cobalt market remained strong. It is expected that in the short term, panic sentiment may not ease, and the spot price of refined cobalt will fluctuate upward.

Intermediate Product:

At the beginning of this week, the spot price of cobalt intermediate products remained stable. In terms of supply, logistics from South Africa to Chinese ports continued to operate normally, but the expectation of supply contraction due to DRC's suspension of cobalt product exports continued to ferment, keeping upstream producers' spot order prices at high levels, with limited market circulation. From the demand side, downstream inquiries were active, but there was a gap between the expected purchase price and the producer's quotation, resulting in low actual transactions. It is expected that this week, the market will gradually digest the impact of the DRC news, and the spot price of cobalt intermediate products may fluctuate upward.

Cobalt Sulphate:

At the beginning of this week, the price of cobalt sulphate increased. Previously, a spokesperson for the DRC government stated that the country's ban on cobalt product exports might be extended. Stimulated by this news, some salt plants, out of concern for raw material shortages, strengthened their willingness to hold back cargoes and stand firm on quotes. From the demand side, downstream enterprises slightly raised their expected purchase prices, but actual transactions still mainly focused on restocking based on rigid demand, with overall sentiment remaining cautious. Market transactions were mainly sporadic spot orders, without large-scale concentrated procurement. It is expected that this week, salt plants' strategy of controlling volume and standing firm on quotes may continue, and the spot price of cobalt sulphate may maintain a fluctuating upward trend.

Cobalt Chloride:

At the beginning of this week, the price of cobalt chloride experienced a slight decline. In terms of supply, market sentiment gradually eased, and cobalt chloride producers no longer insisted on withholding supplies, showing a stronger willingness to sell. From the demand side, major purchasers of Co3O4 maintained a wait-and-see attitude, although inquiries increased, the actual transaction volume remained low. In the future, the market is expected to continue to be affected by the cobalt export ban, and panic sentiment may persist. Some producers may choose to maintain current prices and adopt a strategy of holding back cargoes, which could lead to a slight rise in the price of cobalt chloride.

Cobalt Salt (Co3O4):

At the beginning of this week, the price of Co3O4 showed little fluctuation. In terms of supply, most smelters still suspended quotations, hoping to achieve higher profits. Although a few companies provided quotations, the prices were high, and some urgent orders had to accept these high prices, but most producers had already completed their procurement, resulting in fewer new orders this week. From the demand side, the purchase willingness of downstream LCO producers was lower than expected, and the acceptance of high Co3O4 prices was low. In the short term, the price of Co3O4 may remain at a high level, but the high-price intention of the supply side and the resistance from the demand side have formed a tug-of-war, restraining further price increases.

Cobalt Powder and Others:

Recently, the cobalt powder market has shown a relatively stable trend, with little price fluctuation and a generally steady market performance. The downstream hard alloy industry continues to adopt a purchasing-as-needed strategy, and the industry generally holds a cautious and conservative attitude towards the currently high cobalt powder prices. In this context, the market trading atmosphere is somewhat cold, with both buyers and sellers showing a cautious and watchful stance.

Ternary Cathode Precursor:

This week, the prices of 5-series, 6-series, and 8-series ternary cathode precursors all continued to rise slightly. In terms of raw material costs, nickel sulphate prices rose slightly, manganese sulphate prices remained stable, while cobalt sulphate, influenced by the DRC's cobalt export ban and market sentiment, showed a short-term fluctuating trend, driving the prices of various series of precursors to rise to varying degrees. From the demand side, material producers as a whole maintained a cautious and watchful attitude. Top-tier enterprises may sign a small number of spot orders to replenish basic inventory, but mainly rely on long-term contracts for supply. Medium and small-sized manufacturers, due to the consumption of historical inventory, have a certain need for receiving goods, but the procurement volume is limited, and overall market demand is weak. In terms of supply, the rise in raw material costs further exacerbated the losses of precursor producers, who strongly intend to stand firm on quotes, and some may separately calculate the discount coefficients for nickel sulphate, cobalt sulphate, and manganese sulphate. Looking ahead to this week, raw material prices are expected to continue to fluctuate slightly. Under the combined effect of the strong sentiment to stand firm on quotes from precursor producers and the downstream restocking demand, the price of precursors may remain relatively firm and show a slight fluctuating trend.

Ternary Cathode Material:

On Monday, the price of ternary cathode material rose slightly, mainly due to the slight increase in nickel sulphate prices and the factor of ternary material producers standing firm on quotes in the spot market. In the spot market, spot order transactions remained few. Previously, the coefficient of some cathode and precursor producers' purchase orders had increased, keeping the production cost and price of ternary materials high.
In terms of production and orders, it is currently expected that the incremental production of ternary battery cells by domestic downstream battery factories in April will be relatively small, with a MoM increase of less than 5% compared to March. Therefore, except for a few top-tier enterprises with increased market share and overseas tolling orders, the production schedule of most ternary material factories in April is expected to remain relatively stable. It is expected that in the short term, the price of ternary materials will follow the fluctuating trend of raw material prices.

LCO:

Driven by the rise in the price of upstream raw material Co3O4, the price of LCO continued to increase this week, but the rate of increase slowed down compared to last week, with the latest prices for 4.2V/4.4V/4.5V LCO being 206,000/210,000/221,000 yuan/mt. Cobalt salt producers generally suspended quotations and held back cargoes, creating a situation where there were prices but no market. Domestic LCO producers, facing difficulties in raw material procurement, either suspended taking orders or only executed previous long-term contracts. On the demand side, orders in the 3C sector (mobile phones, laptops) were stable, and LCO purchases were mainly based on rigid demand. Currently, upstream cobalt ore traders and smelters are pushing up premiums by holding back cargoes, while downstream battery manufacturers have strong bargaining power, putting dual pressure on LCO cathode material producers. The price of LCO still has room for an increase, but the rate of increase may narrow.

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SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Lin Ziya 86-2151666902

Feng Disheng 021-51666714

Lv Yanlin 021-20707875

Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

Wang Jie 021-51595902

Zhang He 021-20707850

Zhang Haohan 021-51666752

Xu Yang 021-51666760

Chen Bolin 021-51666836

Xu Mengqi 021-20707868