[SMM Cobalt Morning Meeting Summary] This week, the spot price of refined cobalt fell significantly, and it may continue to fluctuate next week

Refined Cobalt:

Spot prices of refined cobalt dropped significantly this week. Supply side, the market is still digesting social inventory, and the economic viability of refined cobalt production continues to decline. Smelters are likely to sustain production cuts. On the quotation front, traders' offers have been following the futures market downward. Recently, some traders, affected by funding costs, have made moves to exit the market and sell. Demand side, with the price drop, downstream producers' purchasing situation has slightly improved, and inquiries and buying have warmed up. Refined cobalt spot prices are expected to continue fluctuating next week.

Intermediate Products:

Currently, the market circulation is still dominated by traders' goods, maintaining relatively high quotations. Demand side, as the subsequent policies in the DRC remain unknown, downstream producers are generally dominated by a wait-and-see sentiment. Inquiries and buying were slightly weaker this week, and spot transactions of cobalt intermediate products were mediocre. Cobalt intermediate products are expected to remain stable in the near term.

Cobalt Sulphate:

Spot prices of cobalt sulphate declined this week. Supply side, both smelters and recycling plants have lowered their spot quotations for cobalt sulphate, with actual transactions mainly consisting of sporadic small orders, and transaction prices further declined. Demand side, downstream producers' overall purchasing sentiment was poor, with some ternary precursor plants experiencing slight order reductions, resulting in weak overall stockpiling demand. Additionally, as Co3O4 producers had previously stockpiled, short-term Co3O4 sales have slightly slowed, and producers' willingness to purchase has further declined. Current market transactions are mainly sporadic small orders, with no bulk purchasing actions observed. Cobalt sulphate spot prices are expected to fluctuate weakly next week.

Cobalt Chloride:

Cobalt chloride prices remained firm this week. Supply side, as raw material shortages persist, smelters have a strong willingness to support prices, with an increasingly obvious reluctance to sell, and almost no low-price sales observed. Demand side, downstream enterprises have certain rigid purchasing needs, and influenced by price increase expectations, inquiries have increased, with some high-price transactions occurring. As market inventory continues to deplete, cobalt chloride spot prices are expected to remain high next week and may further increase.

Cobalt Salt (Co3O4):

Co3O4 prices dropped significantly this week. Supply side, although smelter quotations remained relatively stable, the willingness to sell has increased, and the phenomenon of holding back from selling has significantly decreased. Demand side, downstream LCO cathode producers are divided on market prospects, with a strong wait-and-see sentiment, only making necessary purchases for daily production needs. Influenced by the decline in LCO prices, manufacturers generally drive down prices when purchasing raw materials, with weak stockpiling willingness. Against the backdrop of overall market weakness, there have been some low-price transactions. The purchasing peak for Co3O4 is yet to come next week, and spot prices are expected to continue falling.

Cobalt Powder and Others:

The cobalt powder market maintained its steady development trend this week, with quotations from various enterprises remaining stable, showing no significant changes. Price adjustments have not significantly promoted new orders. Demand from the downstream alloy industry remains stable, but as tungsten carbide prices rise and its cost proportion increases, alloy manufacturers' focus has shifted more towards tungsten price dynamics, with relatively less attention on cobalt powder. Therefore, cobalt powder prices are currently showing a stabilizing trend.

Ternary Cathode Precursor:

This week, prices of 5-series, 6-series, and 8-series products in the ternary cathode precursor market showed slight declines. Raw material cost side, nickel sulphate prices increased slightly, while cobalt sulphate and manganese sulphate prices declined due to weak downstream demand. Demand side, the overall performance of the large power precursor market was mediocre, with some order transfers among manufacturers, but overall demand did not show significant growth. Small power and consumer precursor orders have increased recently, but due to the small size of the consumer market, the demand boost to the overall market is limited. Additionally, some downstream ternary cathode material plants currently have sufficient precursor finished product inventory and are in a destocking phase, with no urgent stockpiling needs, resulting in a relatively flat transaction sentiment recently. Price side, due to weak end-use demand, the discount coefficient for ternary cathode precursors is difficult to increase. Looking ahead to next week, as month-end approaches, cathode material manufacturers will enter the traditional stockpiling cycle, and market transaction sentiment is expected to turn positive.

Ternary Cathode Material:

Ternary cathode material prices continued to decline this week. Raw material cost side, nickel sulphate and manganese sulphate prices fluctuated slightly, cobalt sulphate prices decreased slightly, while lithium chemical prices still showed a significant downward trend. Demand side, the large power market has shown some recovery, with some car models performing well in sales, and some models preparing for upcoming launches, providing some support for ternary cathode material demand, but the overall quantity is relatively limited. Consumer and small power markets have seen more orders recently, especially with good overseas market demand, but due to the small size of the consumer market, the overall increase is not significant. Supply side, current market supply mainly relies on previously signed long-term contracts, with some enterprises having increased relevant discount coefficients and adopting a settlement method of separately negotiating discounts for raw materials such as nickel sulphate, cobalt sulphate, and lithium carbonate. Recent market transaction sentiment has been weak, mainly focused on rigid stockpiling needs, but next week will usher in the month-end stockpiling peak, and market activity is expected to increase. Price trend side, nickel sulphate prices are expected to remain firm, but lithium chemicals still have downside room, and ternary cathode material prices, influenced by raw material price fluctuations, may further decline.

LCO:

The LCO market was under pressure this week, with mainstream quotations for 4.2V/4.4V/4.5V products falling to 217,000 yuan/mt, 221,000 yuan/mt, and 232,000 yuan/mt, respectively. Price adjustments were mainly driven by dual pressures from the raw material side: battery-grade lithium carbonate continued its downward trend, and Co3O4 prices slightly loosened due to weak purchasing sentiment. Supply side, top-tier enterprises maintained high production through capacity release. Demand side, as terminal manufacturers prepared for the "618" promotion, battery cell manufacturers' purchasing demand saw a phased increase. Notably, the uncertainty in cobalt raw material supply due to changes in DRC mining policies continues to affect LCO cathode manufacturers' shipment strategies, and market shipments remain cautious.

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Wang Cong 021-51666838

Ma Rui 021-51595780

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Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

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