[SMM Cobalt Morning Meeting Summary] Refined cobalt price slightly decreased, demand remained rigid

Refined Cobalt:

This week, the spot price of refined cobalt declined slightly. Supply side, the market is still digesting the pace of social inventory reduction. The economic viability of refined cobalt production remains relatively low, leading to a slight decrease in the capacity utilization rate of smelters and a minor drop in their quotations. Demand side, there has been no significant change in the purchasing pace of downstream producers, who continue to maintain just-in-time procurement. Inquiries and buying interest remain relatively mediocre. It is expected that next week, the spot price of refined cobalt may continue to fluctuate.

Intermediate Products:

The spot price of cobalt intermediate products declined slightly this week. Supply side, quotations from traders have slightly decreased. Demand side, due to the uncertainty surrounding future policies in the DRC, downstream producers are generally adopting a wait-and-see attitude. Additionally, the recent decline in the prices of cobalt-related products has further exacerbated this sentiment. This week, inquiries and buying interest for cobalt intermediate products have been relatively mediocre. It is expected that next week, the spot price of cobalt intermediate products may continue to fluctuate weakly.

Cobalt Sulphate:

This week, the spot price of cobalt sulphate remained in the doldrums. Supply side, quotations from mainstream smelters have remained relatively stable, with some recycling plants slightly lowering their spot quotations for cobalt sulphate. Demand side, given the uncertainty surrounding future policies in the DRC, downstream producers generally maintain a wait-and-see attitude. Moreover, the order situation of material plants has not shown significant improvement, resulting in a sustained low purchase willingness among downstream producers, with no volume-based procurement activities observed. It is expected that next week, the spot price of cobalt sulphate will continue to fluctuate weakly.

Cobalt Chloride:

This week, the price of cobalt chloride decreased. Supply side, quotations from major smelters have remained firm, indicating a certain reluctance to sell. However, some smelters have shown a relatively strong willingness to sell, leading to a small number of low-priced transactions in the market, which in turn pulled down the overall spot price. Demand side, downstream enterprises are primarily engaged in just-in-time procurement and generally possess a certain level of cobalt salt inventory. As a result, inquiries are relatively few, and a strong wait-and-see atmosphere prevails. Despite this, due to the ongoing shortage of raw materials, market sentiment remains high and relatively consistent in anticipating price increases. It is expected that next week, the spot price of cobalt chloride will continue to fluctuate at a high level and is unlikely to decline.

Cobalt Salts (Co3O4):

This week, the price of Co3O4 declined significantly. Supply side, the market has been relatively sluggish after the holiday, with most smelters lowering their quotations and showing an increased willingness to sell. Some low-priced transactions have further pulled down the spot price. Demand side, LCO cathode producers are only maintaining necessary procurement without the intention of stockpiling inventory. They generally maintain a wait-and-see attitude, with reduced acceptance of Co3O4 prices, and market inquiries remain scarce. It is expected that next week, the peak of market procurement has not yet arrived, demand will remain weak, and there will be a lack of significant upward momentum. The spot price is expected to continue to decline.

Cobalt Powder and Others:

This week, the price of cobalt powder declined slightly, but the price adjustment did not significantly boost orders. Demand in the downstream alloy industry remains stable. However, due to the high price of tungsten carbide and its significant cost proportion, alloy enterprises are more focused on the price trend of tungsten and have relatively low attention to cobalt powder. Under this market structure, the price of cobalt powder fluctuates slightly according to the price of raw materials, lacking obvious drivers for significant price changes in the short term. The market sentiment is characterized by a strong wait-and-see attitude. It is expected that in the short term, the cobalt powder market may continue to exhibit a weak and fluctuating pattern, with prices unlikely to show significant fluctuations. Continuous attention should be paid to the price changes of upstream raw materials and marginal changes in downstream demand.

Ternary Cathode Precursor:

This week, in the market for ternary cathode precursors, the prices of 5-series, 6-series, and 8-series products continued to decline. From the perspective of raw material costs, nickel sulphate, cobalt sulphate, and manganese sulphate all showed a slight downward trend. In the NEV market, there has been a relatively significant increase in orders for domestic 6-series products. In contrast, the demand for 5-series products has been weak, and their market share is expected to continue to shrink. The 8-series products have remained relatively stable. It is expected that there will be a slight recovery in the NEV market in June. In the consumer market, as manufacturers have already completed a certain scale of raw material stockpiling in March and April, and with the continuous decline in raw material prices, market sentiment has turned cautious, gradually entering a destocking phase. It is expected that orders for consumer products will decrease in June. In terms of price trends, influenced by the continuous decline in the prices of nickel sulphate and cobalt sulphate and the overall weak demand, there is still room for further downward movement in precursor prices.

Ternary Cathode Material:

This week, the price of ternary cathode material continued to decline. In terms of raw material costs, nickel sulphate, cobalt sulphate, and manganese sulphate all showed a slight downward trend. The prices of lithium carbonate and lithium hydroxide have not yet hit bottom and continue to be under pressure. In the NEV market, terminal auto sales have fallen short of expectations, leading to weak demand for cathode materials and a gloomy market sentiment. Except for a few leading battery cell manufacturers that have seen an increase in orders, overall demand remains sluggish. In the consumer market, despite an increase in overseas demand, manufacturers had already carried out a certain degree of advance stockpiling during the period of rising raw material prices in March and April. Facing the current downward trend in raw material prices, the market holds a bearish outlook on cobalt salts and lithium chemicals. Additionally, as the stockpiling for the '618' shopping festival has ended, enterprises have generally shifted to destocking operations. In terms of price trends, there is still room for further downward movement in the prices of lithium carbonate, nickel sulphate, and cobalt sulphate. The price of ternary cathode material may continue to decline, influenced by the fluctuations in the prices of upstream raw materials.

LCO:

The LCO market came under pressure and declined this week. The mainstream quotations for 4.2V/4.4V/4.5V products fell to 209,000 yuan/mt, 214,000 yuan/mt, and 225,000 yuan/mt, respectively. The price decline was mainly due to dual pressures from the raw material side: the price of battery-grade lithium carbonate continued to fluctuate downward, and Co3O4 experienced an unexpected drop before and after the holiday. On the supply side, Co3O4 enterprises currently have relatively high inventory reserves, but the storage period for Co3O4 is short. Upstream enterprises have shown a significant increase in their willingness to sell, actively lowering their quotations. Terminal manufacturers are in the phase of digesting battery cell inventory, leading to a decrease in their procurement of cathode materials. LCO cathode plants are relatively cautious in their raw material procurement. In the short term, the support from raw material costs continues to weaken, and there is still room for the price of LCO to decline. In the medium and long term, based on the market's widespread expectation of a delayed implementation of mining policies in the DRC, it is expected that after this round of price bottoming, the clarification of policies in late June will drive the cobalt industry chain to embark on a new round of upward cycle.

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News:    

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[US EV Company Lucid Signs Graphite Contracts in Succession, Securing Mines to Build Local Supply Chain] US electric vehicle company Lucid announced on its official website on Wednesday local time that it has reached a multi-year supply agreement with Graphite One to source natural graphite from within the US. According to the agreement, Graphite One is expected to commence production in 2028, supplying natural graphite to Lucid and its battery suppliers. The press release mentioned that Graphite One's natural graphite comes from the Graphite Creek deposit north of Nome, Alaska, US. This agreement builds on the contract signed by both parties in 2024, with Graphite One having committed to supplying Lucid with artificial graphite for future car models from its proposed anode active material (AAM) factory in Warren, Ohio. (Financial Link)

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