[SMM Cobalt Morning Meeting Summary] Raw material costs weaken, demand is sluggish, and the price center continues to shift downward

Refined cobalt:

At the start of this week, spot refined cobalt prices stopped falling and rebounded. There was no clear bullish news in the market this week; the price increase was mainly driven by improved trading. A large number of traders reported that purchasing willingness from end-users and other traders improved on Monday afternoon, and prices rebounded amid active buying. On the spot side, mainstream smelters maintained EXW prices at 295,000 yuan/mt; trader quotes saw little change in spot-futures price spreads, remaining at premiums of 1,000-13,000 yuan/mt, with sales profits mainly reliant on hedging price spreads between futures contracts and spot-futures price spreads. In the short term, today's price rebound still needs time to prove its sustainability. If purchasing ends and demand weakens again, refined cobalt prices may continue to trend weaker.

Intermediate products:

At the start of this week, the cobalt intermediate product market remained stable. On the supply side, top-tier miners continued to hold prices firm, but downstream purchase intentions remained low, and the gap between the two sides could not be bridged, making miner tenders difficult to conclude. Notably, two suspected deals were reported last week: first, an overseas trader sold small volumes at around $15/lb early in the week, though the market still questioned whether the final buyer was a domestic or overseas enterprise; second, mid-week market talk suggested a domestic trader sold intermediate products in bulk at around $17/lb. Against the backdrop of a prolonged absence of concluded deals, the emergence of these low-priced cargoes further pressured market sentiment. In the short term, the tug-of-war between miners holding prices firm and low-priced market deals continues. If low-priced deals are gradually confirmed, the price center for intermediate products may shift further downward. Attention should be paid to whether miners' firm pricing stance shows signs of loosening.

Cobalt sulphate:

At the start of this week, cobalt sulphate prices stabilized. On the cost side, for primary materials, MHP cobalt payables remained low, with spot production costs hovering around 60,000 yuan/mt; for recycled materials, current cobalt payables were 70-72 for ternary batteries, 69-71 for LCO batteries, 74.5-76 for ternary electrodes, and 72-74 for LCO electrodes. Considering cobalt alone, spot costs were only 56,000-58,000 yuan/mt. Overall cost support continued to weaken, and the cost advantage on the recycling side also left room for low-priced selling. On the supply side, a few recyclers sold at low prices due to financial pressure, with the lowest quotes falling to around 55,000-59,000 yuan/mt. Affected by this low-priced competition, mainstream smelter quotes moved lower in tandem. Producers currently willing to sell quoted 62,000-63,000 yuan/mt, while a few with weaker willingness to sell maintained quotes at 65,000-70,000 yuan/mt or suspended quoting. On the demand side, downstream demand has shown no signs of improvement since September. On the ternary side, there were even rumors that top-tier battery cell manufacturers would significantly cut volumes in September, further weakening demand expectations. Amid price cuts by some smelters, downstream purchase intention prices were lowered to around 60,000 yuan/mt. In the short term, bearish factors on both supply and demand sides continue to build, and the price center may keep moving lower. Attention should be paid to the sustainability of low-priced selling and changes in battery cell manufacturers' production schedules.

Cobalt chloride:

This week, cobalt chloride prices stabilized and remained flat, with market trading still relatively sluggish, mostly quote-driven, and actual trading volume quite limited. On the cost side, current production still maintained a certain profit margin, but because demand has not been released significantly, willingness to sell remained mostly stable. On the supply side, although producers' finished product inventories remained at certain levels, enterprises showed strong willingness to hold prices firm, and the destocking pace stayed steady. On the demand side, production cuts and maintenance in the Co3O4 segment somewhat suppressed raw material consumption, but as downstream purchasing as needed continued, the market was in a temporary relative supply-demand balance. Overall, cobalt chloride prices are expected to remain flat and move sideways in the short term.

Cobalt salts (Co3O4):

This week, Co3O4 prices stopped falling and stabilized, showing an overall flat trend, but market fundamentals did not improve materially. On the supply side, due to persistently sluggish downstream demand, industry maintenance and production cuts or suspensions remained widespread, and producers were forced to maintain low operating rates to ease selling pressure. On the demand side, downstream LCO producers' purchase willingness remained weak. New phone launches and stockpiling expectations provided very limited boost to actual demand. Market trading continued to be sluggish, and inventory digestion remained slow. Overall, under the stalemate of weak supply and demand, Co3O4 prices are expected to remain flat or move sideways in the short term.

Cobalt powder and others:

At the start of this week, the cobalt powder market remained weak. Orders from large downstream cemented carbide enterprises had not yet recovered, and enterprises were still digesting previously accumulated inventories. Procurement demand was released slowly, and market trading remained sluggish. Constrained by persistently weak demand, smelter quotes continued to move lower, with current low-end quotes falling to around 385,000-390,000 yuan/mt. The simultaneous weakening of upstream cobalt salt prices also left cobalt powder costs with little support. In the short term, before downstream inventories are fully digested, the cobalt powder market will struggle to gain substantial demand boost, and prices may continue to slowly hit bottom. Attention should be paid to the pace of order recovery at cemented carbide enterprises.

Ternary cathode precursor:

At the start of the week, ternary cathode precursor prices weakened. Today, manganese sulphate and nickel sulphate prices fell, while cobalt sulphate prices held steady.

On discounts, for September and Q4 orders, some producers still intended to hold prices firm due to higher earlier sulphate raw material costs. On long-term contracts, some producers had already agreed on annual contracts at the beginning of the year, and most producers had not yet raised payables. Downstream acceptance of payables increases for quarterly orders was also weak. Except for some top-tier producers with certain bargaining power, most producers are expected to remain stable overall compared with Q2. On spot orders, as nickel and cobalt salt prices have been relatively weak recently, combined with weak downstream demand for some producers, September order payables remained under pressure.

On production, top-tier producers' export orders remained strong this month, with production schedules at relatively high levels. However, some domestic top-tier producers saw weaker stockpiling willingness and lower operating rates due to end-use demand falling short of expectations. Overall, production schedules showed a downward trend this month.

Looking ahead, sulphate prices have not yet shown a clear rebound, and future new order prices will depend on actual downstream demand in Q4.

Ternary cathode material:

At the start of this week, ternary cathode material prices continued to decline. From the raw material side, nickel sulphate prices weakened slightly and fell below the 30,000 yuan/mt mark, cobalt sulphate prices remained stable at low levels, and lithium carbonate and lithium hydroxide prices extended their declines with losses widening again, dragging ternary cathode material prices further lower. On trading, nickel, cobalt, and lithium chemical prices are all in downward trajectories, with further downside expectations and no signs of stopping falling yet. When prices first fell last week, some producers had already restocked in advance. This week, wait-and-see sentiment intensified and the procurement pace slowed, with trading cooling again. On demand, expectations of weak domestic EV market demand continued, with orders clearly reduced. Downstream mainly consumed inventories, and raw material purchasing sentiment became even more sluggish.

LCO:

This week, domestic LCO market prices pulled back and weakened overall. The industry's traditional "September peak season" boost failed to materialize, and overall fundamentals were under pressure. The cost side was the core drag. Upstream Co3O4 prices fell, directly compressing cost support for LCO and driving product prices down accordingly. On the supply side, domestic cathode enterprises maintained a cautious strategy of producing based on sales, with overall industry output fluctuating little and market supply relatively stable, without obvious supply pressure from supply-demand mismatch. On the demand side, weakness was fully evident. The peak season boost fell far short of market expectations, downstream end-use market stockpiling willingness was low, and the entire process maintained only a procurement pattern of buying as needed. End-use demand lacked effective upward driving force. Currently, the pace of inventory digestion across the industry chain is relatively slow overall, and the supply-demand pattern remains weak without substantive improvement. Although downstream has not actively pushed for lower prices, this cannot offset the dual bearish impact of falling costs and weak demand. Overall, the weak tone of the short-term LCO market has been set, and the downward consolidation trend in prices is clear. Attention should be paid to end-user stockpiling progress in mid-to-late September. If end-use demand remains weak and the peak season continues to be absent, LCO market prices still face the risk of further weakening.

News:    

[Chengxin Lithium: The lithium chemicals market is still in a process of sustained growth] On September 11, Chengxin Lithium stated at the Sichuan region 2026 investor online collective reception day and semi-annual report performance briefing that lithium carbonate futures prices have been fluctuating significantly recently, with futures prices affected by multiple factors including demand and supply expectations, policy changes, capital, and sentiment. The lithium chemicals market is still in a process of sustained growth. During this process, the overall supply-demand pattern is also dynamically changing. Future supply-demand relationship still needs to be comprehensively assessed based on factors such as end-use demand growth, industry inventory changes, the release pace of new resource projects, and the capacity expansion progress of existing resource projects. (Jin10 Data APP)

[Controlling risks from the source: 4 mandatory national standards for mine safety released] The State Administration for Market Regulation (Standardization Administration of China) recently approved and released 4 mandatory national standards for mine safety, including the "Specification for General Survey of Hidden Disaster-Causing Factors in Mines" and "Technical Requirements for Lithium-ion Power Batteries Used in Underground Mines," providing a unified mandatory technical benchmark for mine risk prevention and equipment safety. These standards were organized and formulated by the National Mine Safety Administration and will be implemented from March 1, 2027. (CCTV News)

[New national standard released! Further improving the software safety governance system for intelligent connected vehicles] The State Administration for Market Regulation (Standardization Administration of China) recently approved and released the national standard "Management Specification for Automotive Software Quality and Defects." In terms of quality planning, the standard requires automakers, software providers, and related organizations in the upstream and downstream supply chain to establish software quality and safety management systems, implement 10 key quality assurance activities including software safety management, historical problem avoidance, and status report monitoring, adapt to multiple development models, and strengthen control requirements for multiple types of objects such as artificial intelligence software, embedded software, and cloud software. In terms of key process reviews and software risk assessment, the standard sets review periods for 5 key processes including software project planning, demand analysis, design and implementation, software integration, and verification and validation, allowing combined implementation based on actual project conditions. It requires the establishment of a software risk assessment mechanism, incorporating software issues from each stage into tiered assessment, and promoting the transformation of quality control from "post-event handling" to "defect prevention." (CCTV News)

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