[SMM Cobalt Morning Meeting Summary] Futures and spot refined cobalt prices rise simultaneously, while high inventory in the midstream suppresses transactions

Refined cobalt:

This week, affected by the extended export ban policy in the DRC, both the futures prices on the Zhonglianjin platform and spot prices of refined cobalt rose significantly. Supply side, most refined cobalt smelters maintained long-term contract supplies, with limited spot quotations. After several trading days of wait-and-see sentiment, traders gradually resumed quotations while refusing to budge on prices. Demand side, inquiries from traders and end-users increased notably early in the week under the policy impact, with sporadic actual transactions reported. However, mid-week, as Zhonglianjin futures prices returned to a fluctuating trend, market sentiment cooled, and some traders noted weakened inquiry willingness from end-users, resulting in limited actual transactions. Overall, given the high social inventory in the midstream and no significant improvement in downstream demand, most downstream producers maintained just-in-time procurement despite the DRC policy extension, keeping actual transactions subdued. Refined cobalt prices are expected to revert to a fluctuating pattern next week.

Intermediate products:

Cobalt intermediate product prices rose slightly this week. Supply side, most mines and traders held bullish sentiment, suspending quotations, while a few quoting firms maintained price rigidity. Demand side, smelters faced challenges such as losses and weak downstream demand, leading them to delay purchases and rely on existing inventory amid uncertain future conditions. Some smelters with relatively low inventory attempted inquiries, but actual transactions remained difficult due to significant price gaps between buyers and sellers. Overall, the DRC policy extension will likely lead to raw material shortages for cobalt intermediate products in China, providing upward momentum for prices, though the impact of rising raw material costs on downstream demand requires monitoring.

Cobalt sulphate:

This week, cobalt sulphate prices stopped falling and rebounded due to the DRC policy. Supply side, smelters and traders maintained quotations near previous highs. Demand side, downstream ternary enterprises saw no significant order improvements, opting to wait and digest existing inventory, while refined cobalt purchases remained suspended due to poor economics. Overall, market sentiment improved WoW post-policy, but rapid upstream price hikes and uncertain conditions weakened downstream purchase willingness, limiting actual transactions. Cobalt sulphate prices are expected to stabilize temporarily next week, awaiting feedback from actual transactions.

Cobalt chloride:
Currently, a few cobalt chloride producers quoted prices at 63,000-65,000 yuan/mt, while some salt plants chose to suspend quotations and continue observing the market. Supply side, smelters maintained heavy wait-and-see sentiment, with few market transactions. Demand side, downstream enterprises held relatively ample inventory, actively inquiring but remaining cautious. Price-wise, while smelters began quoting, current offers merely reflected upstream expectations, with actual trends depending on subsequent transaction prices and inventory levels.

Cobalt salt (Co3O4):

Currently, Co3O4 producers still suspended quotations and shipments, with both upstream and downstream adopting a wait-and-see stance and no transactions occurring. Affected by the DRC policy, supply side, Co3O4 plants paused quotations to observe overall market sentiment and demand. Demand side, LCO cathode plants held relatively low inventory but opted to wait due to strong sentiment-driven market volatility. Price-wise, no current quotations exist, though some Co3O4 plants indicated potential shipment expectations at 210,000-220,000 yuan/mt. Specific price trends and ranges will depend on actual transactions. Long-term, Co3O4 prices remain influenced by cobalt inventory, with current industry inventory levels’ sufficiency through December being a key price driver.

Cobalt powder and others:

This week, cobalt powder prices rose due to prolonged delays in raw material imports, with transaction prices up approximately 10,000 yuan WoW, while cobalt carbonate prices followed the upward trend. Downstream alloy enterprises increased inquiries, but as the price hike was largely sentiment-driven, demand remained weak. Short-term price fluctuations persisted, with most alloy enterprises adopting a wait-and-see approach.

Ternary cathode precursor:

This week, prices for 5-series, 6-series, and 8-series ternary cathode precursors rose slightly. Raw material cost side, nickel sulphate and manganese sulphate prices stabilized, while cobalt sulphate rebounded due to the DRC export ban extension, though the upward momentum slowed. Current precursor quotations showed little change, with cathode material producers reluctant to accept higher discount coefficients amid weak ternary market demand, limiting price upside. Demand side, the domestic ternary NEV market remained sluggish, with only some leading battery cell manufacturers reporting order growth. The consumer market performed moderately in June, with some producers expecting a recovery in July. Supply side, June precursor shipments were weak, with notable production cuts at some plants, though a slight recovery is anticipated in July. Driven by rising cobalt sulphate prices, precursor prices may rise slightly in the short term.

Ternary cathode material:

This week, 5-series ternary cathode material prices rose slightly, while 6-series and 8-series prices remained stable. Raw material cost side, nickel sulphate and manganese sulphate prices held steady, while cobalt sulphate rebounded due to the DRC ban but slowed its ascent; lithium carbonate fluctuated, and lithium hydroxide continued its downward trend. Demand side, the domestic ternary NEV market showed mediocre performance, with only some newly launched car models boosting mid-to-high-nickel ternary material orders. In the small power segment, end-use products like e-bikes and power tools performed relatively well in Southeast Asia and India, supporting consumer-grade ternary cathode material orders. Supply side, June actual production and July schedules were flat, with no significant increments, and the market remained cautious about H2 and Q4. Price-wise, rising cobalt sulphate and falling lithium chemicals offset each other, with ternary material prices expected to fluctuate slightly in the short term amid weak demand, lacking strong upward drivers.

LCO:

Recently, LCO producers still refrained from quoting. LCO price adjustments are primarily driven by raw material cost changes: battery-grade lithium carbonate prices continued to decline, while Co3O4 prices showed strong upward sentiment due to the DRC policy. Supply side, Co3O4 producers suspended quotations, leaving LCO cathode plants awaiting clearer upstream prices to determine subsequent pricing and shipments. Demand side, end-use battery cell manufacturers maintained sufficient inventory, though price acceptance depends on whether raw material costs can be passed through. Overall, LCO prices are likely to rise significantly in the short term, with the extent depending on Co3O4 transaction outcomes.

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