[SMM Cobalt Morning Meeting Summary] Refined Cobalt Supply Relatively Sufficient, Stand Firm on Quotes and Hoarding Strategy Continues

Refined Cobalt:

This week, the spot price of refined cobalt stabilised. Supply side, refined cobalt supply remained relatively sufficient, with smelters generally operating at high capacity utilisation rates, and the strategy of holding back cargoes to stand firm on quotes continued. Demand side, downstream inquiries became more rational, overseas shipments slowed, and panic sentiment eased. At the market level, smelters still showed strong sentiment to hold back cargoes, speculative sentiment in the market eased, and spot price increases stabilised. The spot price of refined cobalt is expected to slow its increase this week.

Intermediate Products:

This week, the spot price of cobalt intermediate products increased. Supply side, logistics from South Africa to Chinese ports remained normal, but upstream producers had limited inventory and generally adopted a strategy of holding back cargoes, supplying only long-term contract customers, with spot orders being rare, keeping market liquidity low. Demand side, some downstream salt plants had rigid restocking demand, and there was a certain profit margin between raw materials and cobalt salts, leading to active inquiries and purchases from downstream producers, which drove the continuous rise in the spot price of intermediate products. In the short term, the supply-demand imbalance is unlikely to ease, and cobalt intermediate product prices are expected to remain on an upward trajectory this week.

Cobalt Sulphate:

This week, cobalt sulphate prices slightly increased. The market gradually digested the disruption caused by the DRC's suspension of cobalt exports, and the sentiment to hold back cargoes among cobalt sulphate upstream producers began to ease. Supply side, upstream salt plants' quotes stabilised, and sentiment to close deals improved. Downstream enterprises showed improved restocking enthusiasm MoM, but their expected prices were still slightly lower than the current quotes from salt plants, with actual transactions mainly driven by rigid restocking needs, leading to slight improvement in market liquidity. The spot price of cobalt sulphate is expected to stabilise this week.

Cobalt Chloride:

This week, cobalt chloride prices continued to rise, but the increase slowed compared to the previous week. Due to market sentiment, cobalt chloride producers generally adopted a wait-and-see attitude, not rushing to sell, with high quoting intentions. Some producers used a strategy of small-volume, high-price transactions, pushing up spot prices. However, as raw materials were gradually consumed, the sentiment to hold back cargoes became more evident, resulting in a situation where prices were high but transactions were scarce. In the future, due to rising costs and sustained sentiment, cobalt chloride prices are expected to increase further.

Cobalt Salts (Co3O4):

This week, Co3O4 prices continued to rise. The increase was driven by rising costs and heightened market sentiment, with smelters generally suspending quotes and holding back cargoes for sale becoming more evident. Some enterprises quoted at high levels, and high-priced transactions increased, pushing up Co3O4 spot prices. However, due to lower-than-expected demand from LCO producers and existing inventory, the price increase this week may slow, but there is still upside room.

Cobalt Powder and Others:

This week, cobalt powder market transactions were mainly small-volume spot orders, lacking support from large orders. There were no significant signs of improvement in alloy demand, and with the sharp rise in cobalt powder prices, downstream buyers remained cautious about the market outlook, refraining from increasing inventory and mostly adopting a purchase-as-needed strategy.

Ternary Cathode Precursors:

This week, prices of 5-series consumer-grade, 6-series consumer-grade, and 8-series power-grade ternary cathode precursors continued to rise. In terms of raw material costs, affected by the DRC's cobalt export ban and the overall sentiment to stand firm on quotes in the raw material market, nickel sulphate and manganese sulphate prices continued to rise slightly, while cobalt sulphate prices rose significantly, driving up precursor prices across different series. Demand side, material producers, anticipating continued raw material price increases and depleting historical inventory, gradually engaged in small-scale stockpiling. The market overall remained in a wait-and-see mode, but purchase willingness improved WoW. Supply side, the significant rise in raw material costs exacerbated losses for precursor producers, who showed strong sentiment to stand firm on quotes. Discounts on spot orders were adjusted upward, and some producers recalculated discount coefficients for cobalt sulphate separately. Looking ahead to this week, raw material prices are expected to continue rising. Under the combined influence of strong sentiment to stand firm on quotes among precursor producers and certain restocking demand downstream, precursor prices are likely to rise further.

Ternary Cathode Materials:

On Monday, ternary cathode material prices continued last week's upward trend, but the increase weakened as the rise in cobalt sulphate prices slowed. In the spot market, differing price expectations between buyers and sellers led to fewer transactions. Despite supply chain fluctuations, some leading cathode material enterprises, with stable precursor supply, had not adjusted the details and coefficients of long-term contracts with downstream customers, with price changes mainly concentrated in spot orders and new orders. For other enterprises needing to procure precursor raw materials, production costs increased in the short term.
In negotiations with downstream battery plants, some cathode enterprises were at a disadvantage in agreements, potentially facing losses again in 2025. Therefore, amid recent raw material price increases, some ternary material enterprises adopted a "prefer to halt production and incur losses rather than deliver at low prices" stance, raising requirements for coefficients and details in agreements. However, as of mid-March, many enterprises had not finalised orders. With the general rise in sulphate prices and increased precursor procurement costs, ternary material enterprises showed clear sentiment to stand firm on quotes and hold back cargoes. Ternary material prices are expected to maintain an upward trend later this month.

LCO:

This week, LCO prices were significantly affected by sharp fluctuations in upstream raw material prices, with the latest prices for 4.2V/4.4V/4.5V LCO at 196,000/200,000/210,000 yuan/mt, respectively. Co3O4 quotes rose from 160,000 yuan/mt, with some producers suspending quotes and holding back cargoes, and sporadic market transaction prices exceeded 195,000 yuan/mt, with a weekly increase of over 22%. The average price of battery-grade lithium carbonate slightly declined, mainly due to increased operating rates of lithium chemical enterprises and weak end-use demand. The 3C sector showed mixed performance, with stable Q1 orders from mobile phone and laptop manufacturers, and LCO procurement driven by rigid demand. In the short term, cobalt resource supply risk premiums still have upside room, and LCO prices are expected to remain bullish.

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News:

【Ministry of Commerce: Reform Pilot Projects for Automobile Circulation and Consumption to Be Launched, Focusing on Cultivating New Growth Points in Automobile Consumption】Li Gang, Director of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce, stated at a press conference held by the State Council Information Office on the 17th that reform pilot projects for automobile circulation and consumption will be launched, actively supporting qualified regions to take the lead in promoting efficient circulation of used cars and developing the aftermarket, focusing on cultivating new growth points in automobile consumption.
【BTR: Current Anode Material Capacity at 575,000 mt/year】BTR disclosed during an investor relations event that the NEV and ESS lithium battery markets grew rapidly in 2024, and the industry is expected to continue growing in the future. The company boasts an excellent and stable core team, a high-quality customer structure, full-category product advantages, and an entire industry chain layout, demonstrating significant competitiveness. Additionally, the company has made forward-looking deployments in silicon-based anode materials, solid-state battery materials, and other fields, obtaining multiple patents. Currently, the company's anode material capacity is 575,000 mt/year, with plans to expand capacity in Indonesia and Morocco.
【Belgian Media: Cooperation with China Is the Way Out for Europe's Battery Industry】Belgium's "L'Echo" recently published an article stating that China achieved automotive manufacturing technology accumulation through cooperation with European enterprises in the past, and now Europe urgently needs to learn from this development path in the battery sector. Facing reality, "if you can't beat them, join them" is becoming a consensus in Europe's EV industry chain, particularly evident in the battery sector. This cooperation mirrors China's leveraging of European carmakers to achieve technological accumulation in the past. With history repeating itself, it is now time for Europe to humbly retrace this path of cooperation.

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

Boling Chen 021-51666836

Mengqi Xu 021-20707868