[SMM Weekly Review] Refined cobalt prices experienced significant fluctuations this week, but from the actual supply-demand structure perspective, market fundamentals saw limited changes.

Published: Oct 23, 2025 18:48

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Refined cobalt prices experienced significant fluctuations this week, but from the actual supply-demand structure perspective, changes in market fundamentals were limited. Supply side, smelters continued to suspend quotations due to tight raw material inventory; although traders raised spot quotations following the futures market, trading activity remained sluggish as cobalt prices rose too rapidly early in the week. To promote actual transactions, some traders gradually adjusted their quotation benchmark from a slight premium to parity or even a slight discount. Demand side, downstream enterprises mainly engaged in just-in-time procurement, with no significant increase in overall trading volume. Regarding the price correction observed in the latter half of the week, aside from the impact of capital behavior, analysis suggests it was primarily driven by three factors: first, after the rise in refined cobalt prices, the profit margin for converting it back into cobalt salts narrowed, reducing smelters' purchase willingness; second, although overseas refined cobalt prices remained high, their capacity to absorb excessively high domestic prices was limited; third, the circulation of some low-priced, non-invoiced cargoes in the market exerted downward pressure on mainstream prices. Overall, following this round of price increases, the price spread between refined cobalt and cobalt salts widened once again. Given that refined cobalt can be used as a raw material for conversion back into cobalt salts, its price is expected to gradually converge toward the conversion cost line of cobalt salts to achieve a rationalization of the price spread.

This week, refined cobalt prices experienced significant fluctuations, but from the perspective of actual supply-demand structure, changes in market fundamentals were limited. Supply side, smelters continued to suspend quotations due to tight raw material inventory; although traders raised spot quotations following the futures market, trading activity was sluggish as cobalt prices rose too rapidly early in the week. To promote actual transactions, some traders gradually adjusted their quotation benchmark from a slight premium earlier to parity or even a small discount. Demand side, downstream enterprises primarily engaged in just-in-time procurement, with overall trading volume not showing a significant increase. Regarding the price correction observed in the latter half of the week, aside from the impact of capital behavior, analysis suggests it was mainly driven by three factors: first, after the rise in refined cobalt prices, the profit margin for converting it back into cobalt salts narrowed, reducing smelters' purchase willingness; second, although overseas refined cobalt prices remained high, their ability to absorb excessively high domestic prices was limited; third, the circulation of some low-priced, non-invoiced cargoes in the market exerted downward pressure on mainstream prices. Overall, after this round of price increases, the price spread between refined cobalt and cobalt salts widened again. Considering that refined cobalt can be used as a raw material to be converted back into cobalt salts, its price is expected to gradually converge towards the conversion cost line of cobalt salts to achieve a rationalization of the price spread.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Feng Disheng 021-51666714

Lü Yanlin 021-20707875

Xiao Wenhao 021-51666872

Zhou Zhicheng 021-51666711

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