[SMM Cobalt Morning Meeting Summary] Refined Cobalt Spot Cargo Prices Fluctuate, DRC Policy Becomes a Variable

Refined Cobalt:

This week, the spot price of refined cobalt maintained a fluctuating trend. In terms of supply, due to the low economic viability of refined cobalt production, the operating rates of smelters remained relatively low, leading to a slight decrease in refined cobalt supply. On the demand side, influenced by the policy-related news from the DRC, some smelters and traders reported increased inquiry intentions from downstream producers. However, most buyers and sellers are still in the negotiation phase, and overall market transactions remain sluggish. The DRC's policy is expected to be officially announced by the end of this week, and it is anticipated that the spot price will undergo significant changes after the policy is implemented.

Cobalt Intermediate Products:

This week, the spot price of cobalt intermediate products remained stable. In terms of supply, mainstream mines continued to maintain their long-term contract supply rhythm, and traders' cargo quotations remained stable. On the demand side, downstream smelting enterprises continued to destock, and some traders showed increased inquiry sentiment, but actual transactions were limited. Overall, due to the uncertainty surrounding the DRC's subsequent policies this week, both buyers and sellers remained cautious, and overall spot transactions were sluggish. The DRC's policy is expected to be officially announced by the end of this week. After the policy is implemented, some smelters that previously stockpiled less are expected to gradually resume procurement, potentially improving market transactions.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

This week, the spot price of cobalt sulphate experienced a slight decline. In terms of supply, the quotations of mainstream cobalt sulphate smelters remained relatively stable, with some enterprises lowering their quotations to boost mid-year performance, while recycling plants' quotations remained at the lower end of the market. On the demand side, orders for ternary cathode precursors did not show significant recovery, maintaining just-in-time procurement. Due to the weak economic viability, refined cobalt procurement was basically suspended. Co3O4 enterprises were still destocking due to excessive inventory built up earlier. Overall, although the inquiry intentions of downstream producers increased somewhat due to the news from the DRC, buyers remained cautious, with inquiries mainly aimed at exploring sellers' bottom prices, and actual market transactions were limited. The DRC's policy is expected to be officially announced by the end of this week. After the policy is implemented, the spot price of cobalt sulphate is expected to experience significant fluctuations.

Cobalt Chloride:

This week, the spot price of cobalt chloride continued its downward trend, with overall market transactions remaining sluggish. In terms of supply, some smelters chose to suspend quotations and shipments, awaiting clarification of the upcoming DRC policy, while a few smelters continued to ship at lower prices, causing certain disturbances to market price trends and psychological expectations. On the demand side, downstream enterprises had relatively sufficient inventory levels, and market inquiry enthusiasm was insufficient, with an overall wait-and-see attitude. Recent unofficial information had some impact on market sentiment, but overall market prices remained relatively stable. Given that June 22 is a critical time point for the DRC government's policy announcement, it is expected that cobalt chloride prices will show significant fluctuations next week. If the policy ultimately adopts the form of "delaying the export ban and implementing quota management" as widely anticipated by the market, there is a high possibility of a significant increase in cobalt chloride prices next week.

Cobalt Salts (Co3O4):

This week, the spot price of Co3O4 continued its slight correction. In terms of supply, the market trading atmosphere was sluggish, with most smelters adhering to a price floor of 190,000 yuan/mt, although some still shipped at prices below this level. The main driving factor for the recent continuous price decline was the approaching mid-year, with most smelters having inventory clearance needs, and the emergence of low-priced resources further suppressing spot prices. On the demand side, LCO producers generally adhered to a "produce based on sales" strategy, maintaining a cautious wait-and-see attitude towards Co3O4 procurement. The DRC will finalize its cobalt raw material-related policies by the end of this week, and it is expected that the cobalt market will undergo significant changes next week. If the policy direction aligns with the current mainstream market expectations, namely "delaying the export ban and implementing quota management," there is a high possibility of a significant increase in Co3O4 prices next week.

Cobalt Powder and Others:

This week, the cobalt powder market experienced a slight decline. Cobalt powder enterprises are paying attention to the impact of changes in cobalt raw material policies on the market. Currently, cobalt powder supply remains sufficient, and there is still room for transaction prices. The price of raw material cobalt carbonate also declined, with cost and demand support falling short of expectations. In the short term, the cobalt powder market may continue to maintain a weak and fluctuating trend, with prices unlikely to experience significant fluctuations.

Ternary Cathode Precursors:

This week, in the ternary cathode precursor market, prices of 5-series, 6-series, and 8-series products continued to decline. From the perspective of raw material costs, influenced by weak downstream demand, the prices of nickel sulphate and manganese sulphate continued to decline slightly. Before the official implementation of the DRC's new export policy, the price of cobalt sulphate is expected to continue its downward trend. Recently, market transactions have been generally sluggish. In the NEV market, only some leading battery cell manufacturers have shown relatively good order performance for medium- and high-nickel products, while demand from other enterprises has been relatively average. The consumer market has entered a seasonal off-season, with orders pulling back. From the perspective of product series, it is expected that in the short term, 6-series ternary cathode precursors will continue to squeeze the market share of 5-series and 8-series products. In terms of prices, ternary cathode precursor prices may continue to decline slightly next week.

Ternary Cathode Materials:

This week, the price of ternary cathode materials continued to decline. Affected by the dual impact of weak market demand and overcapacity, the price of ternary cathode materials lacks upward momentum. In terms of raw materials, due to weak downstream demand, the prices of nickel sulphate, cobalt sulphate, and manganese sulphate all showed a slight downward trend. The decline in lithium carbonate prices has slowed down, while lithium hydroxide still shows a relatively obvious downward trend. Currently, it is the traditional off-season for the ternary cathode material market, and the overall market performance in June has been relatively mediocre. In the NEV market, only some leading battery cell manufacturers have certain new demand for medium- and high-nickel products, while most manufacturers' order performance has been mediocre. The demand in the small power and consumer markets has been relatively good, but the recent growth rate has also slowed down. Overall, actual transactions have been relatively sluggish, and the industry's focus is on changes in the DRC's cobalt export policy. It is expected that in the short term, the price of ternary cathode materials will continue to decline.

LCO:

This week, the market price of LCO showed a downward trend. Specifically, the mainstream quotations for 4.2V, 4.4V, and 4.5V specification products fell to 208,000 yuan/mt, 212,000 yuan/mt, and 223,000 yuan/mt, respectively. The price adjustments were mainly driven by changes in raw material costs. Recently, the price of battery-grade lithium carbonate remained stable, while the price of Co3O4 continued its significant decline, jointly exerting downward pressure on the price of LCO. In terms of supply, the shipping enthusiasm of Co3O4 producers has increased somewhat. On the demand side, terminal battery cell manufacturers are in the active destocking phase, leading to weakened procurement demand for cathode materials. LCO cathode material producers have correspondingly reduced their raw material procurement efforts. Given the potential significant changes expected in the Co3O4 market, if its price increases significantly as anticipated, it is expected that there will be strong upward momentum for LCO prices next week.

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