[SMM Cobalt Morning Meeting Minutes] Cobalt Industry Chain Prices Under Pressure in the Peak Season; Signals of a Demand Recovery Still Pending Confirmation

Refined Cobalt:

This week, refined cobalt futures stopped falling and rebounded, and the spot price center edged up slightly. Supply side, at the beginning of the week, an overseas miner announced purchases of low-priced intermediate product in the market, sending a clear signal of holding prices firm. Boosted by this, the low end of electronic trading rebounded from around 290,000 yuan/mt to above 300,000 yuan/mt, and then moved sideways within a range. As market sentiment recovered, traders that had previously suspended quotations gradually resumed external quotations this week, with the spot-futures price spread quoted at a premium of 1,000-13,000 yuan/mt; mainstream smelters’ EXW prices were lowered to 310,000 yuan/mt. Demand side, downstream enterprises’ summer break had not yet ended, and overall purchasing was mainly restocking for rigid demand, with limited improvement in trading activity. In the short term, miners’ efforts to hold prices firm provided some support to prices, but with insufficient demand follow-through during the off-season, the upside room for a rebound might be constrained. Going forward, attention should be paid to the pace of downstream restocking after the summer break ends and the sustainability of intermediate product purchases.

Intermediate Product:

This week, the stalemate in the cobalt intermediate products market remained unchanged, but the center of bargaining shifted down noticeably. Recently, an overseas enterprise sold small volumes of off-spec material at $15/lb, significantly impacting market sentiment. To stabilise market expectations, at the beginning of the week an overseas miner announced purchases of low-priced intermediate product at $16/lb and below, releasing a clear signal of holding prices firm. From the quotation situation, most miners’ target prices still held above $20/lb, but downstream target purchase prices, dragged down by the decline in cobalt salt prices, had further pulled back to $15-18/lb. The price difference between bids and offers still existed; recent tenders largely failed, and deals remained difficult. As of this Thursday, SMM cobalt intermediate products (CIF China) were $18-20/lb, with an average of $19/lb, down $2.5/lb WoW. In the short term, miners’ price-support measures of purchasing low-priced cargo might provide some support to the price floor, but before the psychological price gap between upstream and downstream narrows, the market was still unlikely to see substantive deals, and the stalemate was expected to continue.

Cobalt Sulphate:

This week, the cobalt sulphate market remained weak, with the price center continuing to move lower and the tug-of-war between buyers and sellers further intensifying. Recently, low-priced deals for Indonesian cobalt sulphate at 63,000 yuan/mt significantly impacted the market, becoming the main source of downward pressure on prices this week. Supply side, MHP cobalt payables had pulled back to around a 70% level, and spot production costs fell to about 69,000 yuan/mt, further weakening cost support. Quotation strategies among enterprises using primary material and recycled material tended to converge, with both holding firm at the 70,000 yuan/mt threshold; if downstream enterprises expressed clear purchase intentions, shipments could be considered around 65,000-68,000 yuan/mt. Demand side, downstream purchase indications generally anchored to the earlier low-price deals at 63,000 yuan/mt, with indicated prices capped at 63,000 yuan/mt and below. The price spread between buyers and sellers remained wide, and actual transactions were still difficult. As month-end approached, some enterprises began signing new orders. Currently, downstream indicated prices were at a 10% discount to SMM’s low-end price and below, while upstream indications were at a 7–5% discount. As of this Thursday, SMM spot cobalt sulphate was quoted at 70,000–72,000 yuan/mt, with an average of 71,000 yuan/mt, down a cumulative 2,500 yuan/mt from last Friday (WoW). In the short term, with the September-October peak season approaching, downstream demand recovered slowly and enterprises had stockpiling needs; prices may gradually stop falling and stabilize from late August to early September. However, current market sentiment remained weak, and any price improvement still required clear signals of concentrated downstream purchasing.

Cobalt Chloride:

This week, the cobalt chloride market edged down, with transactions still sluggish and showing no obvious improvement.Cost side, even recycling with the lowest costs now faced losses in nickel, cobalt, and lithium; sentiment side, although enterprise sentiment remained pessimistic, improvement was clearly felt. Facing high-priced inventory in warehouses and high-cost raw material, enterprises’ willingness to hold prices firm for cobalt chloride increased. Demand side, demand remained sluggish; while there would be some purchasing in the market, small-volume buying was not enough to boost prices. Recently, a top-tier upstream player intended to purchase intermediate product at USD 16 with no upper limit, which provided some support to market confidence, but it was still not enough to drive a rebound. Overall, cobalt chloride prices were expected to remain weak but stable in the short term.

Cobalt Salt (Co3O4):

This week, Co3O4 market transactions were also limited, with overall performance steady but weak.Although upstream cobalt chloride prices declined, top-tier players kept their external quotations relatively firm and did not follow raw material prices with sharp cuts, reflecting that enterprises still tended to stabilize price expectations amid insufficient orders. Downstream purchase willingness was low, wait-and-see sentiment was strong, and actual transactions were mainly small orders driven by rigid demand. In the short term, Co3O4 prices were expected to move sideways within a narrow range, with limited downside room and insufficient upside drivers.

Cobalt Powder and Others:

This week, the cobalt powder market continued to grind lower, with the price center further shifting down and market divergence intensifying.Supply side, smelters’ spot order quotation range moved down to 410,000–430,000 yuan/mt, and some batch tender orders were concluded at around 400,000 yuan/mt and slightly below; in the trading segment, the lowest transaction price once dipped to 385,000 yuan/mt. According to SMM, this batch may have been older cargo from earlier inventory; new cargo, constrained by costs, was temporarily unable to follow at this level, and a few low-priced deals had limited guidance for market prices. Demand side, orders at downstream alloy enterprises remained weak, raw material inventory was digested slowly, and aside from normal cargo pick-up under long-term contract, spot order purchasing remained sporadic; overall market trading was sluggish. As of this Thursday, SMM spot cobalt powder was quoted at 410,000–430,000 yuan/mt, with an average of 420,000 yuan/mt, down a cumulative 10,000 yuan/mt from last Friday (WoW). In the short term, with the September-October peak season approaching, if downstream stocking demand is gradually released, prices are expected to gradually stop falling and stabilize in September; however, before concentrated downstream purchasing clearly emerges, cobalt powder prices lacked momentum for a reversal and were expected to continue hitting bottom on a weak note.

Ternary Cathode Precursor:

This week, weakened. During the week, nickel sulphate, declined, held steady.

On discounts, for September and Q3 orders, due to previously high sulphate raw material costs, some producers still had the willingness to hold prices firm. For long-term contract, some producers had annual agreements settled at the beginning of the year; for most producers, coefficients had not been raised, and for quarterly orders, downstream acceptance of coefficient increases was also weak. Except for some top-tier producers with certain bargaining power, most producers were basically flat from Q2 overall. For spot order, as nickel and cobalt salt prices had been relatively weak recently, some downstream enterprises sought toll processing of raw material or increased in-house production scale, and September order coefficients remained under pressure.

On production, top-tier producers’ export orders still performed well this month, and September production schedules were expected to remain at a high level. Domestic top-tier producers also maintained high production loads, but some small and mid-sized producers had not yet been lifted by the peak season, and expectations for September and October production schedules were weak.

Looking ahead, sulphate prices had not shown an obvious rebound, and subsequent new-order prices need to focus on actual downstream demand during the “September-October peak season”.

Ternary Cathode Material:

This week, ternary cathode material prices retreated from highs.Raw material side, nickel sulphate prices weakened again; cobalt sulphate prices saw the decline slow and gradually stabilized; lithium carbonate and lithium hydroxide prices shot up at the start of the week and then pulled back consecutively, jointly driving ternary cathode material prices lower. In terms of transactions, due to wild swings in raw material prices, battery cell manufacturers’ restocking willingness remained weak, and market transactions were relatively sluggish, mainly executing existing orders. Demand side, some battery cell manufacturers in China’s EV market temporarily slowed down the pace of picking up goods, mainly because automaker orders were weaker than expected; export orders remained at a high level and were expected to continue improving. Consumer market side, recent performance remained mediocre, with no signs of improvement. On production schedules, domestic ternary cathode orders in August grew steadily; in September, demand momentum in the EV market was slightly insufficient, and with the August production schedule base expected to hit a record high, September growth was expected to be relatively limited.

LCO:

This week, the LCO market trend was basically flat from last week, overall consolidating on a subdued note.Supply side, enterprises’ operating rates stayed low. Continuous price cuts since the beginning of the year had significantly compressed profit margins, but the effect of boosting shipments was limited, and enterprises were not strongly willing to proactively ramp up production. Demand side, battery cell manufacturers’ production schedules were also weak, providing no obvious boost to LCO; meanwhile, downstream substitution toward ternary cathode material continued to rise, further suppressing LCO demand release. The supply-demand structure showed no improvement, and inventory digestion was slow. In the short term, LCO prices were expected to still face some downward pressure, but the decline may be relatively mild.

News:   

[MIIT: Automakers Should Submit Self-Inspection and Rectification Results by End-December 2026; Those Found to Have Defects Should Proactively Recall]The general offices of four departments, including the Ministry of Industry and Information Technology, issued a notice on launching a special campaign to improve production consistency and quality of road motor vehicle products. The notice proposed organizing enterprises to conduct self-inspection and rectification. Local industry and information technology authorities should organize key local road motor vehicle producers to comprehensively carry out self-inspection and rectification against access management requirements and key rectification issues, systematically identify problems in product production consistency, reliability, durability, and testing/verification of new technologies for the enterprises themselves and key parts suppliers, earnestly complete rectification work, comprehensively strengthen supply chain management, and enhance capabilities to ensure production consistency. Enterprises should submit their self-inspection and rectification results to local industry and information technology authorities by end-December 2026. For identified defects, enterprises should promptly file recall plans with the State Administration for Market Regulation and proactively implement recalls. Local industry and information technology authorities should fulfill territorial responsibilities, supervise and guide local enterprises to strengthen testing and verification for aggressive innovative design of automotive products, fully assess safety risks, and prudently promote the application of new technologies in vehicles. (Jinshi Data APP)

[Cui Dongshu: The Recent Decline in Auto Industry Profits Remained Large; Profitability Pressure on Mainstream Automakers Will Still Increase Sharply]Jinshi Data, Aug 27: Cui Dongshu of the CPCA published an article stating that lithium battery export prices fell 26% from 142,900 yuan in 2024 to 112,300 yuan in 2025, and then fell 11% to 105,000 yuan in 2026. In July, China’s average export battery price was 106,000 yuan, down 3% YoY; from April to July, after the reduction in export tax rebates, the magnitude of price declines improved significantly versus last year. Recently, as the scale of auto production expanded, PPI rose, and upstream lithium carbonate costs increased, lithium battery export prices continued to decline, domestic battery prices surged, and the issue of automakers not making batteries became severe, leading to a sustainable decline in automaker profits. Combined with the downtrend in profit margins in previous years, the recent decline in auto industry profits remained large. With policy support, new energy policy advantages were evident; due to not making batteries and lacking bargaining power, profitability pressure on mainstream automakers will still increase sharply. As the country’s anti-involution efforts continued to advance, the boost to improving upstream industry profits gradually became evident, while downstream pressure remained high.

[Haohua Technology: Average Selling Prices of Fluorine-Containing Lithium Battery Materials Rose More Than 63% YoY]On Aug 27, Haohua Technology released its key operating data for 2026 H1, showing that the average selling prices of multiple major products rose in H1. Among them, fluorocarbon chemicals, supported by quotas as well as the cost side and demand side, rose 16.46% YoY; driven jointly by a tight balance in supply and demand for core raw materials such as LiPF6, low industry inventory, an explosion in downstream demand for new energy vehicles and energy storage, and cost push from upstream lithium fluoride and others, the average selling price of fluorine-containing lithium battery materials was 29,900 yuan/mt, up 63.49% YoY; fluorine-containing polymers saw rigid demand steadily released in downstream lithium battery, electronics, and anti-corrosion fields, coupled with rigid cost support from upstream raw materials such as fluorite and hydrofluoric acid, and overall market performance was stronger than the same period in previous years. (Jinshi Data APP)

Data source statement: Other data besides public information are processed by SMM based on public information, market communication, and SMM’s internal database models, for reference only and not constituting decision-making advice.

SMM New Energy Research Team

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