[SMM Analysis] Cobalt Sulphate Production Dropped 1.56% MoM in August

In August 2025, SMM cobalt sulphate production fell 1.56% MoM but rose 6.26% YoY.

By raw material, cobalt intermediate products accounted for about 55%, MHP for 18%, and recycled materials for 27%. Due to the extended DRC export ban, cobalt intermediate product prices continued to rise, and smelters' inventory of such materials gradually declined, leading to substitution by recycled materials and MHP. However, recent significant increases in the coefficients for MHP and recycled materials have dampened smelters' willingness to procure these alternatives, thus weakening the substitution effect.

Supply side, cobalt sulphate production costs remained inverted in August. Some smelters continued to reduce output or shift to more economically viable products like cobalt chloride and Co3O4 due to weak profitability or raw material shortages. After months of adjustments, however, production schedules have stabilised with limited further downside room.

Demand side, downstream buyers began seasonal stockpiling in August, with improved orders from both ternary and Co3O4 producers. Some buyers with low inventory started market purchases.

By September, small and medium-sized cobalt sulphate producers are expected to see limited further output reductions, while integrated smelters with ternary and Co3O4 capacity may increase production slightly amid improved downstream demand. Overall September production schedules are projected to rise 2.67% MoM.