SMM Cobalt Morning Meeting Summary: Overall Market Supply is Limited, Spot Prices for Cobalt Intermediate Products Remain Stable

Refined Cobalt:

This week, the spot price of refined cobalt fluctuated upward. Supply side, the current social inventory in the market remains high, but the inventory pattern varies slightly. Due to the high raw material prices, the production economics of refined cobalt are poor, and smelters have low enthusiasm for production, with some smelters cutting production. Demand side, downstream producers' inquiry activity has slightly increased, but their willingness to stock up at high prices is not strong. Next week, the price of refined cobalt is expected to maintain a fluctuating trend.

Intermediate Products:

This week, the spot price of cobalt intermediate products remained stable. Supply side, upstream producers generally suspended spot order quotations to ensure supply for long-term contract customers, with some long-term contract delivery times being extended. Only a few traders are transacting, and the overall market circulation is limited. Downstream, a few producers are experiencing raw material shortages, and overall inquiry and buying activity has increased, with actual transactions of cobalt intermediate products showing some recovery. Next week, the short-term supply-demand pattern is unlikely to improve, and the spot price of cobalt intermediate products may fluctuate upward.

Cobalt Sulphate:

This week, the spot price of cobalt sulphate remained stable. Supply side, some cobalt salt producers are experiencing slight raw material shortages, with a slight reluctance to sell and a slight increase in quoted prices, but actual transactions have not shown significant improvement. Demand side, downstream producers are generally taking a wait-and-see attitude towards new goods from salt producers, with some companies still digesting old social inventory. Next week, the short-term supply-demand situation is unlikely to improve significantly, and the spot price of cobalt sulphate may continue to fluctuate.

Cobalt Chloride:

This week, the price of cobalt chloride rose slightly. Supply side, raw material inventory is increasingly tight, and most producers are refusing to sell at low prices, with quotations rising accordingly. Demand side, just-in-time procurement by downstream cobalt tetroxide producers has driven high-price transactions, leading to a slight increase in spot prices. Next week, although market activity remains low, suppliers' reluctance to sell is still strong, and the price of cobalt chloride will continue to fluctuate at highs, with some room for further increase.

Cobalt Salt (Cobalt Tetroxide):

This week, the spot price of cobalt tetroxide dropped slightly. Supply side, most smelters maintained previous quotations without significant adjustments. Demand side, the market is weak, with low activity. Some producers have completed necessary procurement, and their acceptance of high-priced cobalt tetroxide has decreased, leading to reduced trading activity. Based on current market dynamics and demand trends, the price of cobalt tetroxide is expected to face downward pressure next week.

Cobalt Powder and Others:

This week, the cobalt powder market remained stable, with cobalt carbonate quotations fluctuating at highs. The export ban on cobalt ore from the DRC is still in effect, and although a policy review will start in May, current raw material prices remain stable, with sluggish market transactions and smelters generally controlling the pace of shipments. Downstream alloy industry demand is weak, with high inventory and intense industry competition compressing profit margins, leading to low willingness to purchase cobalt powder. In May, due to the rainy season and reduced orders, production is expected to be affected.

Ternary Cathode Precursor:

This week, in the ternary cathode precursor market, prices of 5-series for consumer electronics, 6-series for consumer electronics, and 8-series for NEV continued to rebound. In terms of raw material costs, the prices of nickel sulphate and cobalt sulphate rose slightly, and although the price of manganese sulphate dropped slightly, it could not offset the upward push of nickel and cobalt salts on precursor prices, driving the rebound in prices of various series of precursor products. Demand side, the overall market transaction sentiment was cold this week, with the ternary market lacking new demand drivers, and companies still executing production schedules and existing orders. The overall demand in April is expected to be similar to March. In terms of specific product models, mid-nickel products have relatively good demand this month, and the market share of 6-series ternary precursors is expected to increase. Supply side, due to the long-term cost inversion of precursor products, companies have a strong willingness to stand firm on quotes, and transaction prices remain firm. Considering the significant market fluctuations this year, producers of precursors for NEV generally no longer sign long-term orders (such as six months or a year), instead adopting monthly discount negotiations; meanwhile, some producers have increased the discount coefficient for cobalt sulphate. In the consumer precursor market, spot orders still dominate. Looking ahead to next week, sulphate prices are expected to rebound slightly, and precursor prices may rise slightly driven by the increase in raw material prices.

Ternary Cathode Material:

This week, ternary cathode material prices continued to decline. Although the prices of nickel sulphate and cobalt sulphate rose slightly, they could not offset the downward pressure brought by the significant drop in lithium carbonate and lithium hydroxide prices. Current market supply mainly relies on previously signed long-term contracts, and some companies have increased the relevant discount coefficients. For spot orders, producers generally negotiate discounts for raw materials such as nickel sulphate and cobalt sulphate separately. In terms of production and order execution, production schedules and order deliveries are proceeding orderly, and overall supply is basically flat compared to March. Looking ahead to Q2, demand is expected to rebound compared to Q1, but the increase will be limited. In terms of product structure, mid-nickel ternary material demand has increased this month, and the market share of 6-series products is expected to further increase. In terms of end-use applications, small power ternary material demand has been relatively active recently, while large power and consumer ternary material demand remains stable. Overall, the ternary market still lacks significant new demand drivers. In terms of price, ternary material prices are expected to fluctuate slightly this week due to raw material price fluctuations.

Lithium Cobalt Oxide:

This week, the lithium cobalt oxide market continued to see a tug-of-war between supply and demand, with mainstream quotations for 4.2V/4.4V/4.5V lithium cobalt oxide at 225,000 yuan/mt, 229,000 yuan/mt, and 239,000 yuan/mt, respectively. Supply side, with the completion of industry resumption of work and production in March, industry capacity utilization has returned to a high level, and production schedules are expected to increase by 3% MoM in April. Demand side, Q2, as the peak season for 3C electronics consumption, will drive increased procurement demand from battery cell manufacturers. In terms of price, lithium cobalt oxide prices are mainly affected by raw material prices, and this week, cobalt and lithium carbonate prices were relatively stable, so lithium cobalt oxide prices have not changed much recently. Additionally, lithium cobalt oxide producers are currently taking a wait-and-see attitude, indicating that they will not ship in large quantities in the near future.

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News:    

【Ministry of Commerce Talks About Progress in China-EU Auto Negotiations: China Willing to Resolve Trade Frictions Through Dialogue and Consultation】The Ministry of Commerce held a regular press conference on the afternoon of April 24. Reporter: China and the EU previously agreed to immediately start negotiations on EV price commitments and discuss investment cooperation in the auto industry. Can the Ministry of Commerce reveal the current progress of the negotiations? Ministry of Commerce Spokesperson He Yadong: Since the video meeting between Minister Wang Wentao and EU Trade and Economic Security Commissioner Šefčovič on April 8, the technical teams of China and the EU have maintained close communication on EV price commitments and trade and investment cooperation, and have accelerated the negotiation process. China is willing to work with the EU to properly resolve trade frictions through dialogue and consultation, deepen bilateral practical cooperation, and inject more certainty and positive energy into the Chinese, European, and global economies.
【Honda: Will Jointly Develop LFP Batteries with CATL】Honda stated that it will cooperate with CATL to jointly develop an efficient platform that places batteries directly in the auto body; it will jointly develop LFP batteries with CATL and plans to adopt these batteries in the upcoming third-generation YE series models. (Cailian Press)
【Tesla's Q1 Sales in Europe Plunge 45%】Data released by the European Automobile Manufacturers Association on the 24th shows that in the first three months of this year, new car registrations in the EU fell by 1.9% YoY. The market share of EVs and hybrid vehicles continues to expand, while the share of traditional internal combustion engine vehicles has shrunk significantly. Data shows that in Q1, gasoline car registrations fell by 20.6% YoY to 779,000 units, with the share dropping to 28.7%. Diesel car registrations fell by 27.1%, with the market share dropping to 9.5%. Pure EV registrations in Q1 increased by 23.9% to 413,000 units, accounting for 15.2% of the total market share, up from 12% in the same period last year. Data shows that in Q1, US EV manufacturer Tesla's new car sales in Europe fell by 45% YoY.

SMM New Energy Research Team

Cong Wang 021-51666838

Rui Ma 021-51595780

Ziya Lin 86-2151666902

Disheng Feng 021-51666714

Yanlin Lü 021-20707875

Zhicheng Zhou 021-51666711

Zihan Wang 021-51666914

Jie Wang 021-51595902

He Zhang 021-20707850

Haohan Zhang 021-51666752

Yang Xu 021-51666760

Bolin Chen 021-51666836

Mengqi Xu 021-20707868