In Q3 2024, spot prices for refined cobalt in China continued to decline. Breaking it down:
In July 2024, the domestic average spot price for refined cobalt was 206,800 yuan/mt, down 8% MoM and 31% YoY. The prices of new brands were slightly lower than those of established companies, and with end-use demand lower-than-expected, cut-throat competition intensified, leading to a price decline amid industry price wars.
In August 2024, the domestic average spot price for refined cobalt was 186,000 yuan/mt, down 10% MoM and 30% YoY. Demand side, the overseas summer break continued, and domestic demand showed no improvement, with the overall market supported by long-term contract demand. Supply side, smelters maintained full production to ensure fixed order deliveries. Cost side, smelters' raw material long-term contracts are expected to end soon, potentially strengthening cost support in the future. Market situation, due to the lower prices of new brands and weak spot demand, spot prices may be further dragged down.
In September 2024, the domestic average spot price for refined cobalt was 171,000 yuan/mt, down 8% MoM and 33% YoY. In September, supply side production maintained an increase, while demand side was mainly driven by fixed delivery volumes, with limited recovery in actual end-use demand. Therefore, with supply exceeding demand, spot prices continued to decline.
In Q4, supply side refined cobalt production is expected to maintain an increase; demand side, due to the pre-overbooking by leading refined cobalt smelters, their spot circulation volume is expected to decline. Additionally, due to their brand effect, it is difficult for downstream demand to find substitute brands, thus spot prices may rise. However, in the long run, as spot market inventory remains and demand recovery is lower than supply increase, the upward space for spot prices may be limited under the condition of supply exceeding demand.
