[SMM Cobalt Morning Meeting Summary] Raw Material Prices Pulled Back, Ternary Cathode Material Fell Under Pressure

Refined cobalt:

Refined cobalt spot prices returned to a grind lower pattern this week. Supply side, EXW prices at mainstream smelters edged up to 390,000 yuan/mt, but as market conditions continued to weaken, most traders suspended quoting, creating a strong wait-and-see atmosphere. Demand side, with the arrival of hot weather, downstream enterprises gradually entered their summer breaks, purchase willingness was sluggish, and only small volumes of rigid restocking demand were maintained. No significant changes occurred in refined cobalt fundamentals this week; amid extremely sluggish transactions, a small amount of capital exiting due to bearish sentiment created an obvious drag on prices. Overall, July-August is the traditional consumption off-season for refined cobalt, demand support is limited, and prices will likely remain in the doldrums in the short term.

Intermediate products:

Cobalt intermediate product prices held stable overall this week. Supply side, some Chinese-invested miners based their offer benchmarks on the European standard low-grade refined cobalt price * (cobalt hydroxide payable - premium), but due to significant divergence in upstream and downstream expectations for the premium coefficient, actual transactions struggled to progress. Demand side, cobalt salt market valuations remained low, and the acceptable raw material purchase price level for downstream smelters was only near $22-23/lb, with only a small volume of trader inventory cargoes transacted within this range. In the short term, miners still have the willingness to hold prices firm, but downstream smelting demand support is insufficient, and buyers and sellers remain in a game stage, with intermediate product prices expected to continue stable operation.

Cobalt sulphate:

Cobalt sulphate market transactions remained sluggish this week. Supply side, primary smelter offers stayed high, with mainstream enterprises continuing to defend the 85,000 yuan/mt mark; recycling smelters maintained their lowest offers at 80,000-81,000 yuan/mt to accelerate capital turnover. Demand side showed no improvement; top-tier enterprise inventories were still relatively ample, with no purchasing demand released yet, and a new round of restocking is not expected to start until after August. Small and medium-sized enterprises had rigid demand, but the in the doldrums prices suppressed their stockpiling enthusiasm, and they maintained only small-volume purchasing as needed. In the short term, cobalt sulphate prices are expected to consolidate on a subdued note, and a sustained recovery still awaits the fulfillment of concentrated downstream restocking demand.

Cobalt chloride:

The cobalt chloride market continued its sluggish pattern this week, with sparse actual transactions, though enquiry activity picked up compared to the previous period. Supply side, most enterprises still maintained their offers above the 100,000 yuan/mt mark; surface-level quotes were relatively unchanged, but based on actual negotiations, there was still some room for concessions in transactions. Demand side, downstream raw material inventories remained ample, compounded by weak end-user orders, overall purchase willingness was insufficient. Overall, market pessimism continued to spread, creating strong constraints on prices and the procurement pace, and the market will likely mainly consolidate in the short term, though there is still potential for further downside in Q3.

Cobalt salt (Co3O4):

The Co3O4 market also maintained a sluggish pattern this week, with actual transactions being few and far between. Supply side, affected by weakening demand and their own high inventories, most enterprises successively reduced their production schedule loads, though prices have recently stabilized, and enterprises generally had no intention to further lower quotes to sell. Demand side, although inventory levels varied among cathode material enterprises, they remained high overall, and there was almost no active purchasing intention at this stage. In the short term, Co3O4 prices are expected to mainly move sideways.

Cobalt powder and others:

The cobalt powder market continued its weakness this week, with mainstream transaction prices grinding lower to 460,000 yuan/mt, and trader quotes already appearing as low as 440,000-450,000 yuan/mt. Affected by the "rush to buy amid continuous price rise and hold back amid price downturn" mentality, downstream enterprises generally adopted short-cycle restocking strategies of half a month to one month, while room for price negotiation still existed for large orders. Raw material side, cobalt carbonate quotes approached the 200,000 yuan/mt mark, with almost zero transactions. The other raw material for downstream cemented carbide, tungsten carbide, fell below 900,000 yuan/mt, with mainstream transactions reaching 850,000 yuan/mt, and its downward speed exceeded market expectations. The industry generally expects a round of concentrated restocking may begin in August-September; until then, weak demand persists, and cobalt-series prices will likely mainly grind downward in search of a bottom.

Ternary cathode precursor:

This week, dipped slightly. Nickel sulphate and fell this week, while rose slightly.

Regarding discounts, for orders in July and Q3, some producers were more willing to raise discounts due to higher sulphate raw material costs. For long-term contracts, some producers' annual contracts were fixed at the beginning of the year, so coefficients did not rise; for quarterly orders, downstream acceptance of coefficient increases was also weak, with overall coefficients remaining stable compared to Q2. For spot orders, the nickel and cobalt payables for some consumer market spot orders had already risen in June, but due to the relatively weak recent performance of nickel and cobalt salt prices, order coefficients did not see further increases overall in July.

Production-wise, leading producers' export orders performed well again this month, and their production schedules were at high levels, but some other producers reduced production loads due to finished product inventory buildup caused by downstream mid-year inventory control.

Looking ahead, sulphate prices have generally pulled back recently, and future new order prices will depend on monitoring the downstream stockpiling pace in Q3.

Ternary cathode material:

This week, ternary cathode material prices remained on a downtrend. Raw material side, nickel sulphate and cobalt sulphate prices consolidated and slightly edged down due to sluggish market transactions; manganese sulphate prices edged up; lithium carbonate and lithium hydroxide prices saw more obvious declines recently due to capital-side disturbances. Transaction sentiment-wise, last week, when lithium chemical prices fell quickly, some producers restocked at low price levels, making transactions relatively active. Entering this week, raw material prices continued their decline without signs of stopping falling; downstream battery cell manufacturers, already holding ample inventories, generally turned cautious and wait-and-see, their procurement pace slowed, and this week's transaction sentiment was relatively sluggish. Discount-wise, affected by the continuous decline in absolute nickel sulphate prices, the nickel sulphate discount applied during settlement by some ternary producers was raised, while discounts for other metals remained relatively stable. Demand-wise, recent power market demand stayed high with normal order execution; consumer market demand continued its mediocre trend.

LCO:

The LCO market continued its stable but subdued trend this week. Upstream lithium carbonate and Co3O4 price centers continued to shift lower, creating some downward pull on LCO quotes, but the falling price trend did not effectively transmit to the transaction side. Demand side still lacked highlights, downstream orders remained weak overall, and while upstream raw material prices had not yet stabilized, buyers generally maintained a wait-and-see strategy, entering the market mainly with rigid, sporadic purchasing as needed, making scale transactions hard to come by. Currently, sellers and buyers remain in a stalemate, waiting for a clear direction. Future trends require continued monitoring of upstream raw material cost changes and whether substantive improvement occurs in the downstream restocking pace.

News:    

[China's June power battery and ESS battery sales up 49.1% YoY] The China Automotive Power Battery Industry Innovation Alliance released power battery data for June 2026. In June, China's power battery and ESS battery sales were 196.0 GWh, up 7.6% MoM and up 49.1% YoY. Among these, power battery sales were 133.4 GWh (68.1% of total sales), up 5.0% MoM and up 41.8% YoY; ESS battery sales were 62.6 GWh (31.9% of total sales), up 13.4% MoM and up 67.5% YoY. From January to June, China's cumulative power battery and ESS battery sales were 979.4 GWh, up 48.6% YoY. Among these, cumulative power battery sales were 661.3 GWh (67.5% of total cumulative sales), up 36.2% YoY; cumulative ESS battery sales were 318.1 GWh (32.5% of total cumulative sales), up 83.4% YoY.

[China Securities: Bullish on lithium battery equipment and solid-state battery sector allocation value] A China Securities research report believes that the lithium battery equipment industry continues to follow the logic chain of “record-high production schedules—order fulfillment—profit recovery.” In July, China's lithium battery production schedules were approximately 283 GWh, up 5.6% MoM, marking the fifth consecutive month of historical peak refreshment. The ESS battery cell proportion rose to 42.9%, and demand shifted from being driven by NEV alone to multi-polar growth, with energy storage becoming the primary growth engine, driving continued equipment-side prosperity. The industrialisation of solid-state batteries is accelerating, with intensive commissioning of GWh-level all-solid-state production lines and simultaneous acceleration of pilot line construction at top-tier battery plants. In July, the solid-state battery industry classification standard was officially released, and the industry is moving from policy guidance towards standardized development. Equipment-side orders are gradually landing, with Gokin Solar securing a 2 GWh solid-state production line front-end core equipment order from Jinlongyu, marking the beginning of equipment-side benefits. 2026 is seen by multiple automakers as the first year for the industrialisation verification of all-solid-state technology, and the equipment tender window is opening. Furthermore, lithium battery equipment enterprises are building second growth curves through platform-based expansion, go-global layouts, and new technology positioning, smoothing cyclical fluctuations operationally and driving a valuation re-rating from “cyclical lithium battery equipment supplier” to “platform-based high-end equipment supplier.” The current sector sits in a triple resonance window of “high production schedule prosperity + accelerated solid-state industrialisation + sodium-ion battery commercialisation,” and the team continues to be bullish on the allocation value of the lithium battery equipment and solid-state battery sectors.

[“China's Automobile Industry Vehicle Cost Calculation Rules” group standard officially released] Recently, the “China's Automobile Industry Vehicle Cost Calculation Rules” group standard, led by CAAM and jointly compiled by 18 mainstream domestic automakers, was officially released. This is the first set of unified cost calculation rules for the automotive vehicle sector in China, ending the industry's long history of "inconsistent calculation standards and no benchmarks for comparison." This is a key measure for rectifying disorderly price competition in the automotive industry and promoting high-quality development, as well as an important achievement of the entire industry in building consensus and establishing self-regulatory rules. (From Wall Street CN APP)

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Lin Ziya 86-2151666902

Feng Disheng 021-51666714

Lyu Yanlin 021-20707875

Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

Wang Jie 021-51595902

Zhang Haohan 021-51666752

Chen Bolin 021-51666836

Xu Mengqi 021-20707868