[SMM Cobalt Morning Meeting Summary] Refined cobalt supply declines, demand waits and sees, prices continue to fluctuate

Refined Cobalt:

This week, the spot price of refined cobalt maintained a fluctuating trend. In terms of supply, constrained by the relatively low economic efficiency of refined cobalt production, the operating rate of smelters remained low, leading to a slight decline in refined cobalt supply. On the demand side, influenced by the recent policy-related news from the DRC, some smelters and traders reported an increased willingness of downstream producers to inquire about prices. However, most buyers and sellers are still in the negotiation phase, with overall market transactions remaining sluggish. It is expected that the spot price of refined cobalt will continue to fluctuate before the official policy announcement.

Cobalt Intermediate Products:

This week, the spot price of cobalt intermediate products changed relatively little. In terms of supply, mainstream mines continued to maintain a long-term contract supply rhythm, with spot sales still restricted, and traders' cargo quotations remaining stable. On the demand side, when news emerged last week about a possible delay in DRC policies, some traders reported a significant increase in inquiry sentiment and a small number of transactions were realized. However, overall, with the uncertainty surrounding the subsequent policy direction, buyers and sellers remain cautious, and overall spot transactions remain relatively sluggish. It is expected that the spot price of cobalt intermediate products will remain stable before the official policy announcement.

Cobalt Sulphate:

This week, the spot price of cobalt sulphate experienced a slight decline. In terms of supply, the quotations of mainstream cobalt sulphate smelters remained largely unchanged, with some recycling plants still offering relatively low prices. On the demand side, orders from ternary cathode precursor enterprises did not show significant recovery. Refined cobalt production was cut due to weak economic efficiency, and Co3O4 enterprises were still depleting their inventory built up earlier. Starting mid-week, although the willingness of downstream producers to inquire about prices increased due to the news from the DRC, buyers remained cautious, focusing on probing the sellers' bottom prices, and actual spot transactions between buyers and sellers did not improve significantly. It is expected that the spot price of cobalt sulphate will continue to fluctuate weakly before the official policy announcement.

Cobalt Chloride:

This week, the spot price of cobalt chloride dropped back slightly. The supply landscape is structurally differentiated: leading smelters maintained stable quotations, with a firm stance on refusing to budge on prices; a small number of producers engaged in transactions at lower prices, exerting some downward pressure on spot prices. On the demand side, downstream enterprises have relatively sufficient inventory levels, with insufficient market inquiry enthusiasm, maintaining an overall wait-and-see attitude. The widely held bullish expectations in the market remain highly consistent and stable. Despite the recent influx of various market news with unclear sources, which may cause some short-term market disruptions, it is not expected to change the overall price trend. The spot price of cobalt chloride will continue to exhibit a fluctuating trend at highs, with limited room for pullbacks.

Cobalt Salts (Co3O4):

This week, the spot price of Co3O4 in the market continued to pull back. In terms of supply, market activity was insufficient after the holiday, with smelters generally lowering their quotations and showing increased willingness to sell at lower prices, further suppressing spot prices with cheaper cargo offerings. On the demand side, LCO enterprises' procurement was mainly for essential production needs, lacking the intention to build inventory. They generally maintained a cautious wait-and-see attitude, with a clear sentiment to drive down prices, and market inquiries were sluggish. It is expected that terminal procurement sentiment will remain low next week, with weak demand-side support, and spot prices will continue to face downward pressure.

Cobalt Powder and Others:

This week, the cobalt powder market experienced a slight price pullback, yet this adjustment did not significantly boost order volumes. Demand from the downstream alloy industry remains stable. However, due to the persistently high prices of tungsten carbide, resulting in a high proportion of costs, alloy enterprises are focusing more on the dynamics of tungsten prices, with relatively less attention paid to cobalt powder. The market generally maintains a wait-and-see attitude. Looking ahead in the short term, the cobalt powder market may continue to exhibit a weak fluctuating trend, with prices unlikely to experience significant fluctuations.

Ternary Cathode Precursor:

On Monday, 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, the price of cobalt sulphate continued to fall, manganese sulphate decreased slightly, and nickel sulphate remained stable. In the NEV market, domestic orders for 6-series ternary cathode precursors increased significantly, mainly due to two reasons: firstly, relatively good demand for downstream medium-to-high nickel products; secondly, 6-series products possess dual advantages in terms of cost and performance, attracting attention from overseas battery cell manufacturers, with some overseas customers currently conducting verification of 6-series products. In contrast, the market share of 5-series and 8-series products is gradually being compressed. In the consumer market, demand for small power applications such as two-wheelers in Southeast Asia and India performed well, with orders expected to maintain stable growth in the coming period. Overall, the current transaction atmosphere in the precursor market remains relatively sluggish, with enterprises generally focusing on changes in the prices of raw materials such as cobalt sulphate. In the short term, ternary cathode precursor prices are expected to continue to show a slight downward trend.

Ternary Cathode Material:

On Monday, ternary cathode material prices continued their downward trend. In terms of raw material costs, the prices of cobalt sulphate and manganese sulphate decreased slightly, nickel sulphate remained stable, while lithium carbonate and lithium hydroxide continued to decline. In the NEV market, June is a traditional off-season for the NEV market, with flat vehicle sales performance. However, some leading battery cell manufacturers have seen a significant increase in procurement demand for medium-to-high nickel ternary cathode materials, mainly due to two reasons: firstly, to stock up in advance for upcoming new car models; secondly, for product verification at overseas battery cell manufacturers. In the consumer market, the consumer electronics industry has entered a phase of inventory destocking, with orders and production schedules declining, while end-use demand remains generally good. In the small power market, demand in Southeast Asia and India has performed well, with related orders being active recently. Overall, the market transaction atmosphere is relatively weak, with enterprises generally closely monitoring the impact of DRC trade policies on the price trends of raw materials. It is expected that in the short term, ternary cathode material prices will continue their downward trend.

LCO Cathode:

The LCO cathode market remained relatively stable this week, with mainstream quotations for 4.2V/4.4V/4.5V products falling to 209,000 yuan/mt, 213,000 yuan/mt, and 224,000 yuan/mt, respectively. Prices are influenced by changes in the prices of raw materials such as lithium carbonate and Co3O4: the price of battery-grade lithium carbonate has recently rebounded slightly, while the price of Co3O4 has still fallen by a certain margin. Overall, this has not had a significant impact on LCO cathode prices. On the supply side, Co3O4 enterprises currently have relatively abundant inventory reserves, with upstream willingness to sell significantly increasing, and they have taken the initiative to lower their quotations. On the demand side, terminal manufacturers are in the phase of digesting battery cell inventory, with reduced procurement of cathode materials, and LCO cathode plants are relatively cautious in raw material procurement. It is expected that LCO cathode prices will remain stable in the short term.

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News:    

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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