[SMM Cobalt Morning Meeting Summary] Refined cobalt price fluctuates rangebound under the produce-based-on-sales model

Refined cobalt:

On Monday, the refined cobalt price remained stable. In terms of supply, smelters maintained long-term contract supplies, with few spot orders. Traders generally kept their quotes unchanged from last week, and some traders reported that prices for certain high-end brands had pulled back, with market transaction prices returning to around the ex-factory prices. On the demand side, due to the relatively high social inventory of refined cobalt in the midstream and no significant improvement in downstream demand, even with the major positive news of DRC's delay, most downstream producers continued to make just-in-time procurement, resulting in still mediocre actual transactions. It is expected that the refined cobalt price will continue to maintain a fluctuating trend in the short term.

Intermediate products:

On Monday, cobalt intermediate product enterprises still maintained a wait-and-see sentiment, with no actual transactions.In terms of supply, most mines and traders held bullish sentiments, suspending quotations, while a few quoting companies maintained their prices. On the demand side, smelters faced challenges such as production losses and weak downstream demand, and under unclear future conditions, they continued to hold off on purchases, mainly consuming their own inventories. Some smelters with lower inventories attempted to inquire about prices in the market, but due to large price discrepancies between buyers and sellers, it was still difficult to achieve actual transactions. Overall, influenced by DRC's delay policy, China's cobalt intermediate products will face raw material shortages in the future, with upward momentum in prices, but attention needs to be paid to how rising raw material prices may suppress downstream demand during this process.

Cobalt sulphate:

On Monday, the cobalt sulphate price remained stable.In terms of supply, most smelters and traders maintained new goods' quotes at the previous high points of 5.0~5.2, and some smelters and traders reported that there were older goods traded at lower prices. On the demand side, orders for ternary and Co3O4 downstream enterprises did not show significant improvement, temporarily adopting a wait-and-see attitude and focusing on digesting previous inventories; refined cobalt purchases were still suspended due to poor economics. Overall, under the current unclear situation, upstream parties insisted on refusing to budge on prices, while downstream purchase willingness was weak, leading to limited actual transactions. It is expected that the cobalt sulphate price may continue to stabilize this week, awaiting feedback from actual market transactions.

Cobalt chloride:

Currently, a few cobalt chloride enterprises quoted 63,000-65,000 yuan/mt, while some salt plants chose to suspend quotations and continue observing the market.In terms of supply, smelters' wait-and-see sentiment was still strong, with few market transactions; on the demand side, downstream enterprises had relatively sufficient inventory levels, actively inquiring about prices, but remaining cautious in trading. In terms of prices, although upstream smelters have started quoting, these are only expectations of the current market prices, and specific price trends need to refer to subsequent actual transaction situations and upstream and downstream inventory conditions.

Cobalt salts (Co3O4):

Currently, Co3O4 enterprises still suspended quotations and shipments, with both upstream and downstream parties maintaining a wait-and-see attitude without any transactions.Affected by DRC's policies, on the supply side, Co3O4 plants chose to suspend quotations and observe the overall market sentiment and demand; on the demand side, LCO cathode plants had relatively low inventories, but the overall market was significantly affected by sentiment, leading to a wait-and-see approach. In terms of prices, there were currently no quotations, but some Co3O4 plants indicated that shipment expectations might be in the range of 210,000-220,000 yuan/mt. Specific price trends and changes would need to be determined after actual transactions occur. In the long term, Co3O4 prices are still influenced by cobalt inventories, and whether the current industry inventory can support until December is key to influencing price trends.

Cobalt powder and others:

This week, the cobalt powder market saw price increases due to the continuous delay in raw material imports, with transaction prices rising by about 10,000 yuan compared to last week, and the price of raw material cobalt carbonate also increased following the rise in raw materials.Downstream alloy enterprises inquired more about prices, but since this price increase was largely influenced by news, downstream demand has not yet recovered. In the short term, although prices fluctuated, downstream alloy enterprises mostly adopted a wait-and-see attitude.

Ternary cathode precursor:

On Monday, the prices of 5-series, 6-series, and 8-series ternary cathode precursors remained stable overall.In terms of raw material costs, nickel sulphate and manganese sulphate prices were basically flat, while cobalt sulphate lacked upward momentum due to the still weak ternary market demand, with relatively small fluctuations. Most producers believed that the current precursor prices lacked upward momentum, and the discount coefficient showed no significant adjustment. On the demand side, the market was in a destocking phase in June, with a relatively mediocre performance; a small-scale restocking is expected in July, but the restocking volume will be limited. Although there were some order shifts in the NEV market, the total demand change was relatively small; the consumer market was affected by the "power bank recall" incident, which may impact subsequent orders. Overall, the market holds a cautious attitude towards Q3 this year, and the traditional September-October peak season may not see a significant increase.

Ternary cathode material:

On Monday, the 5-series ternary cathode material price remained stable, while the 6-series and 8-series material prices slightly decreased. In terms of raw materials, the prices of nickel sulphate, cobalt sulphate, and manganese sulphate showed little fluctuation; lithium carbonate rebounded slightly driven by the futures market, while lithium hydroxide continued its downward trend. On the demand side, influenced by the half-year period, some producers actively destocked for cash flow considerations, leading to a relatively weak overall market performance. In the NEV market, some new car models led to moderate stockpiling; the consumer market was impacted by the "power bank recall" incident, putting pressure on short-term orders. In terms of supply, based on the current July production schedule, there was a certain recovery MoM, but the recovery extent was relatively limited. In terms of prices, the current ternary cathode discount coefficient showed no change, and downstream battery cell manufacturers were cautiously observing the upward trend in cobalt sulphate prices. Overall, it is expected that the ternary cathode material price will continue to show a slight downward trend in the short term, following the fluctuations in raw material prices.

LCO:

Recently, LCO enterprises have not yet quoted prices.LCO price adjustments were mainly driven by changes in raw material costs: recently, the price of battery-grade lithium carbonate continued to decline, while Co3O4 prices, influenced by DRC's policies, showed a strong sentiment for price increases. In terms of supply, Co3O4 enterprises chose to suspend quotations and shipments, and LCO cathode plants still needed to wait for clear upstream prices before determining subsequent prices and shipment situations; on the demand side, terminal battery cell manufacturers still had sufficient inventories, but their acceptance of prices needed to consider whether raw material price increases could be passed on to the end-users. Overall, LCO prices are expected to see a significant increase in the short term, with the specific magnitude needing to refer to Co3O4 transaction situations.

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SMM New Energy Research Team

Cong Wang 021-51666838

Rui Ma 021-51595780

Ziya Lin 86-2151666902

Disheng Feng 021-51666714

Yanlin Lyu 021-20707875

Zhicheng Zhou 021-51666711

Zihan Wang 021-51666914

Jie Wang 021-51595902

Haohan Zhang 021-51666752

Bolun Chen 021-51666836

Mengqi Xu 021-20707868