[SMM Analysis: Lithium Battery Entire Industry Chain Enters Peak Season in September, End-Use Demand Expected to Continue Increasing] SMM October 10: In September, China's monthly lithium carbonate production continued to hit new highs, up 2% MoM and significantly up 52% YoY; lithium hydroxide production surged 26% MoM; cobalt sulphate production rose 8.24% MoM and increased 17.6% YoY; Co3O4 production showed significant growth, up 9% MoM and 40% YoY; ternary cathode precursor production continued its strong growth trend, up 12.28% MoM and 22.05% YoY; ternary cathode material production maintained strong growth, up 13.55% MoM and 23.44% YoY; iron phosphate production surged 17% MoM and increased 58% YoY; LFP material production increased approximately 12.8% MoM and 42% YoY, with an industry operating rate of about 68%; LCO market showed steady growth, with monthly production achieving a slight increase, up 3% MoM and significantly climbing 55% YoY.

Currently, the price increase in the sulfate segment has not been fully passed on to downstream battery cell manufacturers, and battery cell manufacturers have very limited acceptance of the rise in ternary cathode material prices. Under cost pressure, cathode plants also have relatively limited acceptance of the increase in the discount coefficient for upstream ternary cathode precursors.

The market generally expects prices to continue their upward trend, with a strong wait-and-see sentiment prevailing in the initial post-holiday period, leading to relatively cautious trading performance.

Spot cobalt sulphate prices rose significantly this week. Supply side, overseas cobalt prices continued to strengthen during the National Day holiday, and domestic smelters, bullish on the outlook, mostly held back offers and further raised their intended selling prices. Among them, enterprises producing cobalt sulphate from intermediate products raised their target prices to around 80,000 yuan/mt, while MHP and recycling enterprises also generally increased their target prices to approximately 75,000 yuan/mt. Demand side, some downstream ternary cathode precursor and Co3O4 enterprises, concerned about potential supply gaps, showed increased purchase willingness recently. However, as their own downstream orders are not fully locked in and the DRC's quota allocation policy remains uncertain, actual procurement remained cautious, and market transactions were still sluggish. Overall, driven by rising raw material costs and periodic downstream stockpiling demand, cobalt sulphate prices are expected to hold up well in the short term.

This week, spot prices for cobalt intermediate products continued their upward trend. Supply side, mainstream mining enterprises and traders generally anticipate that China's cobalt raw material supply will remain tight in the future, leading them to continue suspending quotations, with limited spot cargo available in the market. Demand side, some cobalt smelters are facing tight raw material inventory, coupled with rapid price increases in cobalt salt and refined cobalt, the production margins for externally purchased intermediate products have slightly improved, and downstream inquiry prices have gradually moved higher. However, constrained by suppliers' strong stance of refusing to budge on prices and evident reluctance to sell, actual market transactions remained sluggish, resulting in an overall pattern of "nominal prices without actual trading." Against the backdrop of the DRC's export ban extension by nearly one month and the implementation of a 50% export quota restriction, China's cobalt raw material supply is expected to remain structurally tight, and cobalt intermediate product prices still possess further upward momentum.

This week, spot prices for refined cobalt continued their upward trend. During the National Day holiday, overseas refined cobalt prices kept rising, driving domestic prices to follow suit on the first day after the holiday. Supply side, smelters, constrained by tight raw material inventory and increased bullish expectations for the future, generally suspended quotations; traders mostly followed domestic futures trends, raising spot offers. Demand side, affected by the rapid price increase of refined cobalt, traditional downstream enterprises such as alloys and magnetic materials faced cost pressure, with poor price transmission, and mostly maintained just-in-time procurement strategies, resulting in sluggish actual market transactions. In the short term, the market is widely focused on the final implementation of the DRC's export quota policy on October 15. Before the policy is clarified, buyers and sellers are expected to remain cautious and adopt a wait-and-see attitude, with overall transaction activity likely to remain limited and prices potentially continuing their strong trend.