[SMM Weekly Review] Cobalt Market Continues to Grind Lower

Refined cobalt:

This week, refined cobalt prices continued to consolidate on a subdued note. On the supply side, mainstream smelters lowered ex-works quotes to 335,000 yuan/mt; quotation basis at small and medium smelters remained in the range of discounts of 6,000 yuan/mt to premiums of 4,000 yuan/mt; mainstream trader quotation basis remained from parity to a premium of 10,000 yuan/mt. On the demand side, downstream enterprises were still in their summer break period, maintaining only small amounts of need-based restocking, and trading sentiment was sluggish. No obvious new drivers emerged in the market this week; supply-demand fundamentals changed little, and prices continued to consolidate at lows. Overall, the market remained in the consumption off-season, demand support was limited, and prices may continue to consolidate on a subdued note in the short term. Going forward, attention should be paid to changes in the pace of downstream restocking after the summer break ends.

Cobalt intermediate products:

This week, the cobalt intermediate products market remained in a stalemate, with actual transactions still largely absent. Recently, some miners launched tenders with indicative prices of around $21-22/lb, but against the backdrop of continued weakness in cobalt salts and refined cobalt, psychological price levels among downstream enterprises and traders had pulled back to around $17-19/lb. The price spread between buyers and sellers was extremely wide, and tenders continued to fail. Faced with the prolonged stalemate, some miners began to consider a shift in strategy, suspending direct sales of intermediate products and instead seeking toll manufacturers to process them into refined cobalt before selling, in order to avoid losses from direct sales at current low prices. In the short term, although miners were willing to hold prices firm, the lack of actual downstream buying cooperation left the market locked in a standoff, and price stabilization still awaited substantive transactions.

Cobalt sulphate:

This week, the cobalt sulphate market continued to trend weakly, with buyers' and sellers' psychological price levels continuing to diverge and transaction volumes struggling to expand. Supply-side quotations diverged significantly: primary smelters had not yet fully consumed their earlier high-priced raw materials, and their offers remained around 80,000 yuan/mt; however, MHP cobalt payables fell to around 80%, spot costs had pulled back to 76,000-78,000 yuan/mt, and cost support had actually begun to loosen. Recycling enterprises showed a strong willingness to sell, with mainstream quotations at around 95% of the SMM low-end price; some financially constrained enterprises continued to lower prices in exchange for liquidity. Low-priced resources in the market moved down to 70,000-72,000 yuan/mt, and a few extreme transactions were heard at 68,000-70,000 yuan/mt, but these were still mainly sporadic spot orders. On the demand side, performance was weak: downstream enterprises saw slow order recovery and purchased only to meet immediate needs; some inquiry indications were lowered to 68,000 yuan/mt, but the price spread between buyers and sellers was wide, and actual concluded deals were limited. In the short term, the cobalt sulphate market had not yet shown clear signs of stopping the decline, and price stabilization still awaited a concentrated release of downstream restocking demand.

Cobalt powder:

This week, the cobalt powder market still showed no improvement; both buyers and sellers lacked the willingness to take the initiative, and actual transactions remained sluggish. Producer offers remained in the 430,000-450,000 yuan/mt range, but the center of actual transactions gradually shifted toward the low end, with some deals falling to 420,000-430,000 yuan/mt. High-priced material clearly lacked buying interest. Pressure on the trading segment intensified, with low-priced offers appearing frequently and continuously dragging down market psychological price levels. On the downstream side, cemented carbide enterprises saw weak end-user orders, raw material consumption cycles lengthened, procurement was mainly long-term contract cargo pick-up, and spot order restocking was minimal. Weakening cobalt carbonate prices further weakened cost support, overall market sentiment turned pessimistic, and cobalt powder prices may continue to search for a bottom on a weak note in the short term.

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