[SMM Cobalt Morning Meeting Summary] Refined cobalt prices fell this week, and the volatile trend will continue

Refined Cobalt:

This week, the spot price of refined cobalt declined slightly. Supply side, mainstream traders' quotations have slightly decreased. Due to the relatively low economic efficiency of refined cobalt production, smelters' operating rates remain low, leading to a slight decline in refined cobalt supply. The market is still digesting social inventory. Demand side, downstream producers continue to maintain a just-in-time procurement rhythm, with no significant stockpiling observed. Overall market buying sentiment remains weak. It is expected that the spot price of refined cobalt will continue to fluctuate this week.

Intermediate Products:

The spot price of cobalt intermediate products has stabilized. Supply side, mainstream mines continue to maintain long-term contract supply and have suspended spot cargo shipments. Traders' cargo quotations have stabilized at high levels. Demand side, due to uncertainty surrounding future policies in the DRC, downstream producers generally adopt a wait-and-see attitude. Additionally, recent price declines in cobalt-related products have led to a decrease in downstream buying sentiment. Overall, spot transactions of cobalt intermediate products have been relatively mediocre this week. It is expected that the spot price of cobalt intermediate products will remain stable next week.

Cobalt Sulphate:

This week, the spot price of cobalt sulphate declined. Supply side, quotations from mainstream cobalt sulphate smelters have slightly decreased, while quotations from recycling plants have fallen more significantly. Demand side, given the uncertainty surrounding future policies in the DRC, downstream producers generally adopt a wait-and-see attitude. Orders from ternary cathode precursor enterprises have not shown significant improvement, while Co3O4 enterprises, due to excessive inventory built up earlier, are still in the process of destocking. Therefore, downstream producers remain cautious overall, with continued low purchase willingness. Spot transactions of cobalt sulphate have been extremely mediocre. It is expected that the spot price of cobalt sulphate will continue to fluctuate weakly this week.

Cobalt Chloride:

This week, the spot price of cobalt chloride experienced a slight correction. The supply side presents a differentiated pattern: mainstream smelters' quotations remain firm, with a clear reluctance to budge on prices. However, some producers have shown increased willingness to sell at high prices, leading to sporadic low-price transactions in the market, which have formed a temporary suppression on spot prices. On the demand side, downstream enterprises currently have relatively sufficient inventory, with market inquiries remaining sluggish and a wait-and-see attitude persisting. It is worth noting that the market's bullish expectations remain highly aligned and have not undergone fundamental changes. Overall, it is expected that the spot price of cobalt chloride will continue to fluctuate at highs next week, with limited room for downward adjustment.

Cobalt Salt (Co3O4):

This week, the price of Co3O4 declined significantly. Supply side, the market has been relatively sluggish after the holiday. Most smelters have lowered their quotations and shown increased willingness to sell, with some low-price transactions further pulling down spot prices. Demand side, LCO producers only maintain necessary procurement without the intention of hoarding inventory, adopting an overall wait-and-see attitude. Their acceptance of Co3O4 prices has decreased, and market inquiries remain scarce. It is expected that the peak of market procurement has not yet arrived next week, with demand remaining weak and lacking significant upward momentum. Spot prices are 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 from the downstream alloy industry remains stable. However, due to the still-high price of tungsten carbide, which accounts for a significant portion of costs, alloy enterprises are more focused on the price trend of tungsten and have relatively low attention to cobalt powder. Under this market pattern, cobalt powder prices fluctuate slightly according to raw material prices, lacking clear drivers for significant price changes in the short term. The market sentiment remains cautious. It is expected that in the short term, the cobalt powder market may continue to be in the doldrums, with prices unlikely to fluctuate significantly. Continuous attention should be paid to changes in upstream raw material prices and downstream demand margins.

Ternary Cathode Precursor:

This week, prices of 5-series, 6-series, and 8-series products in the ternary cathode precursor market 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, domestic orders for 6-series products have increased significantly. In contrast, demand for 5-series products has been weak, with their market share expected to continue shrinking. Meanwhile, 8-series products have remained relatively stable. It is expected that the NEV market will see a slight recovery in June. In the consumer market, as manufacturers have completed a certain scale of raw material stockpiling in March and April, and with raw material prices continuing to decline, market sentiment has turned cautious, gradually entering a destocking phase. Orders for consumer products in June are expected to decrease. In terms of price trends, influenced by the continuous decline in nickel sulphate and cobalt sulphate prices and weak overall 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. Lithium carbonate and lithium hydroxide prices have not yet hit bottom and continue to face downward 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 salts. Additionally, as 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 lithium carbonate, nickel sulphate, and cobalt sulphate prices. Affected by fluctuations in upstream raw material prices, ternary cathode material prices may still decline further.

LCO:

The LCO market remained relatively stable this week. 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. Prices are under dual downward pressure from the raw material side: battery-grade lithium carbonate prices continue to fluctuate downward, and Co3O4 prices have fallen unexpectedly before and after the holiday. On the supply side, Co3O4 enterprises still have relatively high inventory reserves. However, due to the short storage period of Co3O4, upstream producers' willingness to sell has significantly increased, and they have actively lowered their quotations. Terminal manufacturers are in the phase of digesting battery cell inventory, leading to a decrease in cathode material procurement. LCO cathode plants are relatively cautious in raw material procurement. In the short term, the support from raw material costs continues to weaken, and there is still room for LCO prices 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, after this round of price bottoming, it is expected that policy clarification in late June will drive the cobalt industry chain to embark on a new round of upward cycle.

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SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Lin Ziya 86-2151666902

Feng Disheng 021-51666714

Lv Yanlin 021-20707875

Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

Wang Jie 021-51595902

Zhang Haohan 021-51666752

Chen Bolin 021-51666836

Xu Mengqi 021-20707868