【SMM Cobalt Morning Meeting Summary】Raw materials remain at a high level, and the production economy of refined cobalt is poor

Refined Cobalt:

This week, the spot price of refined cobalt has remained relatively stable. From the supply side, social inventory levels in the market remain high, though there are slight differences in inventory patterns. From the production side, due to the sustained high prices of raw materials, the economic viability of refined cobalt production is poor, and production cuts at smelters are likely to continue in the future. However, the overall availability of refined cobalt in the market remains sufficient. From the demand side, inquiries and purchases from downstream producers have been relatively sluggish. It is expected that this week, the price of refined cobalt will maintain a fluctuating trend.

Intermediate Products:

This week, the spot price of cobalt intermediate products has fluctuated upward. On the supply side, upstream producers have generally suspended spot order quotations to secure supplies for long-term contract clients. The expected delivery times for some long-term contracts have been extended, with only a few traders in the market engaging in transactions and shipping goods, resulting in a relatively tight overall supply. Downstream inquiries and purchases have been active, with some producers restocking, leading to a relatively high level of actual transaction activity for cobalt intermediate products. This week, it is unlikely that the short-term supply-demand pattern will improve significantly, and the spot price of cobalt intermediate products is expected to hold up well.

Cobalt Sulphate:

This week, the spot price of cobalt sulphate has remained stable. From the supply side, cobalt salt producers have continued to stand firm on quotes and hold back on sales, maintaining relatively high offer prices. However, actual transactions remain very sluggish. From the demand side, downstream producers are generally adopting a wait-and-see attitude towards new supplies from salt producers, maintaining only regular inquiries without significant purchases. Some enterprises are still digesting old social inventory. It is expected that this week, the short-term supply-demand situation is unlikely to improve, and the spot price of cobalt sulphate may continue to fluctuate.

Cobalt Chloride:

At the beginning of this week, the price of cobalt chloride remained stable. From the supply side, due to increasingly tight raw material inventories, most producers have refused to sell at low prices, leading to continued high quotations. On the demand side, despite the overall low market activity, some producers still maintain a certain level of purchasing demand for cobalt chloride to ensure stable production line operations, keeping transaction prices stable at high levels. It is expected that this week, even with low market activity, suppliers' sentiment to hold back on sales will remain strong, leading to cobalt chloride prices continuing to fluctuate at highs, with some room for increase.

Cobalt Salts (Co3O4):

At the beginning of this week, the spot price of Co3O4 fell slightly. From the supply side, the market has shown weakness, with some smelters lowering their quotes and increasing their willingness to sell, though overall transaction activity remains low. On the demand side, some enterprises have completed their necessary purchases and have reduced their acceptance of high-priced Co3O4, leading to decreased transaction activity. Considering current market dynamics and demand trends, it is expected that this week, Co3O4 prices will still face downward pressure.

Cobalt Powder and Others:

This week, the cobalt powder market has maintained a stable trend, with cobalt carbonate quotations fluctuating at highs. The export ban on cobalt ore from the Democratic Republic of the Congo (DRC) remains in effect. Although a policy evaluation is scheduled to begin in May, current raw material prices are temporarily stable, with sluggish market transactions. Smelters are generally controlling their shipping pace. Downstream alloy industry demand is weak, with high inventory levels and intense industry competition, leading to continuously compressed profit margins and low purchasing willingness for cobalt powder. Affected by the upcoming rainy season and reduced orders in May, production is expected to be impacted.

Ternary Cathode Precursor:

On Monday, prices for 5-series for consumer electronics, 6-series for consumer electronics, and 8-series for NEV products in the ternary cathode precursor market remained stable. In terms of raw material costs, the prices of nickel sulphate, manganese sulphate, and cobalt sulphate have remained generally stable without significant fluctuations. From the demand side, overall market transaction sentiment has been relatively cold this week, with enterprises continuing to operate according to production schedules and existing orders. Demand for small power and consumer-type precursors has been good recently, with relatively active order signing. Orders for large power-type precursors have remained relatively stable. On the supply side, affected by the long-term losses of precursor products, enterprises have a strong sentiment to stand firm on quotes, with transaction prices remaining firm. Considering the significant market fluctuations this year, producers of precursors for NEVs have generally ceased signing long-term orders (such as six-month or one-year contracts), instead adopting monthly discount negotiations. Meanwhile, some producers have increased the discount coefficients for cobalt sulphate and nickel sulphate. For the consumer-type precursor market, spot transactions still dominate. Looking ahead this week, it is expected that sulphate prices will rebound slightly, and precursor prices may rise slightly driven by increases in raw material prices.

Ternary Cathode Material:

On Monday, ternary cathode material prices fell slightly. In terms of raw materials, the prices of nickel sulphate, cobalt sulphate, and manganese sulphate have remained generally stable, while the prices of lithium carbonate and lithium hydroxide have continued to decline. Currently, market supply mainly relies on previously signed long-term contracts, with some enterprises having increased the relevant discount coefficients. For spot transactions, producers generally settle by negotiating discounts separately for raw materials such as nickel sulphate and cobalt sulphate. In terms of production and order execution, demand for small power and consumer-type ternary cathode materials has been good this month, with relatively active order signing. Demand for large power-type ternary cathode materials has remained relatively stable. It is expected that total market supply will increase slightly in May, with the increase mainly coming from small power, consumer-type orders, and demand from some overseas large power customers. From a product structure perspective, demand for medium-nickel ternary cathode materials has increased in Q2. It is expected that the market share of 6-series ternary cathode materials will further increase, gradually squeezing the market share of 8-series ternary cathode materials. Due to the current cost advantages of medium-nickel materials, the trend towards medium-nickelization is expected to emerge in overseas markets in the future. In terms of prices, it is expected that this week, ternary cathode material prices will still be affected by the decline in lithium chemical prices, showing an overall slight fluctuating trend.

LCO:

This week, the LCO market has continued to experience a tug-of-war between supply and demand, with mainstream quotations for 4.2V/4.4V/4.5V LCO at 224,000 yuan/mt, 228,000 yuan/mt, and 238,000 yuan/mt, respectively. On the supply side, with the completion of industry chain resumption and production in March, industry capacity utilization rates have recovered to high levels. It is expected that production schedules in April will increase by 3% MoM. On the demand side, Q2, as the peak consumption season for 3C electronics, will drive increased purchasing demand from battery cell manufacturers. In terms of prices, LCO prices are mainly influenced by raw material prices. This week, the prices of cobalt and lithium carbonate have declined. Additionally, both buyers and sellers of LCO have adopted a wait-and-see attitude, leading to a recent decline in LCO prices.

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News:    

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