[SMM Weekly Review] Cobalt Market Trading Sluggish, Prices Continue Downward Drift

Refined cobalt:

This week, spot prices for refined cobalt remained in the doldrums, with futures prices continuously putting pressure on the spot market. Supply side, mainstream smelters lowered their ex-factory quotations to 385,000 yuan/mt. After the deep price decline, most traders suspended external quotations, and wait-and-see sentiment dominated the market. Demand side, the rush-to-buy-amid-continuous-price-rise-and-hold-back-amid-price-downturn mentality continued to restrain downstream procurement pace. Alloy enterprises maintained a wait-and-see stance and postponed restocking, while some magnetic material enterprises released procurement demand in small quantities near 380,000 yuan/mt to restock opportunistically. In the short term, futures will remain volatile and under pressure. Two conditions are needed for refined cobalt prices to stabilize: first, market funding pressure eases and low-price selling declines; second, prices of cobalt salt and related products stop falling and stabilize, providing market confidence support.

Cobalt intermediate products:

This week, the cobalt intermediate product market continued to fluctuate, with little change in the price center. Supply side, mainstream miners and traders kept their offers steady at around $25.5/lb, but downstream smelters remained conservative in purchasing, with intended purchase prices generally below $25/lb. Some smelters even planned to sell their intermediate products at $24.8-24.9/lb and switch to purchasing low-priced recycled black mass to control production costs. Logistics side, since May, some Chinese miners have gradually increased chartered shipments, and some leading miners have gradually resumed shipments since June. Port arrivals of intermediate products are expected to trend slowly upward in the coming months and are likely to see concentrated arrivals in batches after August. In the short term, with insufficient end-use demand support, prices will likely continue to move sideways. If the market is to strengthen later, a resonance between downstream operating rate recovery and cobalt salt price repair is still needed.

Cobalt sulphate:

This week, trading atmosphere in the cobalt sulphate market remained sluggish, with the spot price center slowly edging lower. Supply side, performance continued to diverge: primary smelters' quotations remained relatively firm, with mainstream producers still holding their minimum intended selling price above 85,000 yuan/mt; some recycling smelters and traders, under cash flow pressure, continued to lower offers to 80,000-81,000 yuan/mt. Demand side, the continuous decline in prices has dampened downstream stockpiling confidence, and enterprises' psychological price levels mostly concentrate at 79,000-80,000 yuan/mt. Although some downstream intended purchase prices have now converged with the lowest sellers' offers in the market, because the low-priced cargoes have not yet fully matched downstream requirements in terms of commercial terms and product quality, bulk transactions remain limited. In the short term, the soft pattern of cobalt sulphate prices is unlikely to be fundamentally reversed. Market stabilization and recovery still await substantial realization of downstream concentrated restocking demand.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Feng Disheng 021-51666714

Lyu Yanlin 021-20707875

Xiao Wenhao 021-51666872

Zhang Haohan 021-51666752

Wang Zihan 021-51666914

Wang Jie 021-51595902

Xu Yang 021-51666760

Yang Lianting 021-51595835

Wang Zhaoyu 021-51666827