[SMM Weekly Review] June Import Data Exceeding Expectations Weighs on the Market, Cobalt Market Under Pressure in the Off-Season: Refined Cobalt Leads the Decline, Intermediate Product Stagnant

Refined Cobalt:

The spot price of refined cobalt continued its downward drift this week. Early in the week, futures prices for refined cobalt pulled back sharply, as import data for cobalt intermediate products and refined cobalt slightly exceeded market expectations, triggering concentrated long position liquidation and accelerating the price decline. Prices briefly stabilized mid-week, but lacked momentum for a rebound due to sluggish demand, overall consolidating at lows. On the supply side, mainstream smelters lowered their ex-works quotations to 365,000 yuan/mt. Following the rapid price drop, traders raised their spot-futures price spread to a premium of 1,000-10,000 yuan/mt. On the demand side, downstream enterprises are currently in their summer break cycle, with purchase willingness remaining sluggish and limited to small-volume rigid restocking. Overall, July-August is the traditional consumption off-season for refined cobalt, offering limited demand support, so prices are likely to remain in the doldrums in the short term.

Cobalt Intermediate Products:

The price of cobalt intermediate products remained stable overall this week, with a strong market tug-of-war continuing. On the supply side, some Chinese-backed miners continued to quote prices by referencing the low-end price of the European standard refined cobalt multiplied by the cobalt hydroxide payables, but actual transactions were difficult to conclude due to a clear divergence in psychological price level for the premium coefficient between buyers and sellers. On the demand side, affected by the weakening prices of cobalt salts and refined cobalt, downstream smelters' psychological price level for raw materials further pulled back to near $21-22/lb. Additionally, China's cobalt intermediate product import data for June, released early in the week, came in above market expectations, easing some corporate concerns over future raw material shortages and further weakening purchase willingness. In the short term, while miners remain willing to hold prices firm, insufficient downstream demand support means the tug-of-war persists, and intermediate product prices are expected to remain stable.

Cobalt Sulphate:

The trading atmosphere in the cobalt sulphate market remained sluggish this week. On the supply side, primary smelters maintained high quotations, with mainstream enterprises continuing to hold prices firm in the 80,000-85,000 yuan/mt range; recycling smelters showed a relatively stronger willingness to sell, with some companies lowering quotations to below 78,000 yuan/mt. The demand side showed no significant improvement, as top-tier players still held ample raw material inventories and did not release new rounds of procurement demand. Some small and medium-sized enterprises had rigid restocking needs, but affected by the sharp decline in refined cobalt prices, they maintained a cautious procurement stance, with target prices mostly anchored near the 73,000-74,000 yuan/mt cost of dissolving refined cobalt. The price gap with seller quotations remained large, resulting in limited actual transactions. In the short term, cobalt sulphate prices are expected to consolidate on a subdued note, and a sustained market recovery will need to await the realization of concentrated downstream restocking demand.

Cobalt Powder:

The cobalt powder market remained in the doldrums this week, with mainstream transaction prices slipping to 455,000 yuan/mt and low-end trader quotations touching the 440,000-450,000 yuan/mt range. Affected by the persistent price weakness, downstream players maintained a cautious purchasing strategy, shortening restocking cycles to half a month to one month, with more flexible bargaining room for large-volume orders. On the raw material side, cobalt carbonate prices were under pressure, approaching the 200,000 yuan/mt threshold, with the market seeing virtually no transactions. The market generally expects a round of concentrated restocking to emerge in August-September. Before then, demand is unlikely to improve significantly, and cobalt powder prices will likely continue to hit bottom in a weak trend.

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