Prices of cobalt-based products mostly declined, with cobalt tetroxide prices falling by 2,650 yuan in a single week. The market is awaiting policy directions from the DRC [Weekly Observation]

SMM News on June 20: As the DRC's cobalt ban is set to expire soon, various market rumors have surfaced. However, downstream players are mostly adopting a wait-and-see attitude, anticipating the release of the DRC's new cobalt policy. Under these circumstances, cobalt market transactions remained sluggish this week, with prices of some products continuing to decline... SMM has compiled the price changes of cobalt-related products this week, as detailed below:

Refined Cobalt:

According to SMM spot quotes, spot prices for refined cobalt remained stable this week. As of June 20, spot prices for refined cobalt were maintained at 221,000-246,000 yuan/mt, with an average price of 233,500 yuan/mt, unchanged from June 13.

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SMM understands that on the supply side, due to the low economic viability of refined cobalt production, smelters' operating rates remain low, resulting in a slight decrease in refined cobalt supply. On the demand side, influenced by market rumors about the DRC's policy, some smelters and traders have reported increased inquiries from downstream producers. However, most buyers and sellers are still in the negotiation phase, and overall market transactions remain weak.The DRC's policy is expected to be officially announced by the end of this week. It is anticipated that spot prices may experience significant changes after the policy is implemented. Stay tuned for further policy developments.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

Cobalt Sulphate:

According to SMM spot quotes, spot prices for cobalt sulphate showed a downward trend this week. As of June 20, spot prices for cobalt sulphate were maintained at 45,200-48,900 yuan/mt, with an average price of 47,050 yuan/mt, down 650 yuan/mt from June 13, representing a decline of 1.36%.

》Check SMM Cobalt and Lithium Spot Quotes

From the supply and demand perspective, SMM understands that on the supply side, quotes from mainstream cobalt sulphate smelters have remained largely unchanged. Some enterprises have lowered their quotes to boost mid-year performance, while quotes from recycling plants remain at the lower end of the market. On the demand side, orders from ternary cathode precursor producers have not shown significant recovery, maintaining just-in-time procurement. Refined cobalt purchases have been largely suspended due to its low economic viability, and Co3O4 producers are still depleting their inventory built up earlier due to excessive stockpiling.

Overall, despite the increased inquiries from downstream producers influenced by market rumors about the DRC's policy, buyers remain cautious, with inquiries primarily aimed at probing sellers' bottom prices, resulting in limited actual market transactions.The DRC's policy is expected to be officially announced by the end of this week. It is anticipated that spot prices for cobalt sulphate may experience significant fluctuations after the policy is implemented.

Cobalt Chloride:

According to SMM spot quotes, spot prices for cobalt chloride also showed a downward trend this week. As of June 20, spot prices for cobalt chloride were maintained at 57,600-59,100 yuan/mt, with an average price of 58,350 yuan/mt, down 400 yuan/mt from June 13, representing a decline of 0.68%.

According to SMM, in terms of cobalt chloride supply, some smelters have chosen to suspend quoting and shipping, waiting for clarity on the upcoming policies from the Democratic Republic of the Congo (DRC). A few smelters, however, continue to ship at lower prices, causing some disturbances in market price trends and psychological expectations. On the demand side, downstream enterprises have relatively sufficient inventory levels, and market inquiry enthusiasm is low, maintaining an overall wait-and-see attitude. Recent unofficial information has had some impact on market sentiment, but overall market prices remain relatively stable. Given that June 22 is a critical time point for the DRC government's policy announcement, cobalt chloride prices are expected to show significant fluctuations next week. If the policy ultimately adopts the form of "postponing the export ban and implementing quota management," as widely anticipated by the market, there is a possibility of a substantial increase in cobalt chloride prices next week.

Regarding Co3O4:

According to SMM spot quotes, Co3O4 spot prices showed a downward trend this week. As of June 20, Co3O4 spot prices fell to the range of 188,700-192,000 yuan/mt, with an average price of 190,350 yuan/mt, down 2,650 yuan/mt from June 13, representing a decline of 1.37%.

According to SMM, in the Co3O4 market, in terms of supply, the market trading atmosphere is sluggish. Most smelters adhere to a price floor of 190,000 yuan/mt, but some still ship at prices below this level. The main driving factor behind the recent continuous price decline is the approaching mid-year, when most smelters have a need to clear inventory. The emergence of low-priced resources further suppresses spot prices.

On the demand side, LCO producers generally adhere to a "produce based on sales" strategy, adopting a cautious wait-and-see attitude towards Co3O4 procurement. The DRC will finalize its policies related to cobalt raw materials by the end of this week, and significant changes are expected in the cobalt market next week. If the policy direction aligns with the current mainstream market expectations, namely "postponing the export ban and implementing quota management," there is a high likelihood of a substantial increase in Co3O4 prices next week.

On the news front, this week's import and export data for cobalt-related products have been released. Regarding cobalt chloride, according to customs data, China exported 3,000 kg of cobalt chloride in May, down 75% MoM and 3% YoY, all of which was exported to the UK. From January to May, China's cumulative exports of cobalt chloride reached 1,321 mt, up 107% YoY.

Regarding Co3O4, according to customs data, China imported 0.1 mt of Co3O4 in May, down 100% MoM and 100% YoY. China exported 334 mt of Co3O4, down 36% MoM and 27% YoY. Among them, 199 mt of Co3O4 was exported to South Korea, accounting for 60% of the total export volume. From January to May, China's cumulative exports of Co3O4 reached 1,930 mt, up 6% YoY.

In terms of corporate developments, Toyota Tsusho announced that it had reached an agreement with LG Energy Solution to establish a joint venture for automotive battery recycling in North Carolina, US. The newly established joint venture will operate a pre-processing business to crush and sort battery scrap, extracting valuable metals such as nickel, cobalt, and lithium, with the goal of establishing a supply chain that recycles these materials into new battery production. The relevant facilities are expected to commence operations in 2026.