【SMM Analysis：Bulk demand remains sluggish; the refined cobalt market mainly relies on fixed order deliveries】

In July 2024, the domestic refined cobalt spot average price was 206,800 yuan/mt, down 7.89% MoM and 30.72% YoY.

Domestic market: On the supply side, due to the support of fixed orders, smelters maintained a high operating rate. On the demand side, although actual end-user demand recovery was lower than expected, the delivery of long-term orders within the month alleviated inventory pressure at smelters. Additionally, as new brand prices were slightly lower than those of established companies, and with end-user demand falling short of expectations, industry competition intensified, leading to a price decline amid a price war.

Overseas market: In July 2024, the refined cobalt FOB spot average price was $11.33/lb, down MoM. Marketwise, on one hand, demand was weak due to the summer holiday period overseas; on the other hand, domestic refined cobalt capacity expanded rapidly, but demand did not increase synchronously. Therefore, with the expectation of supply exceeding demand in the future, market prices declined.

In August, on the demand side, the overseas summer holiday will continue, and domestic demand shows no improvement, with the overall market supported by long-term order demand. On the supply side, to ensure the delivery of fixed orders, smelters will maintain full production. On the cost side, as the long-term contracts for raw materials at smelters are about to end, cost support may strengthen in the future. Overall, due to the persistent oversupply in the market, the downward trend in spot prices may continue; however, with stronger cost support, the price decline is expected to be limited.