[SMM Analysis] National Day Holiday Cobalt Market Review: Prices Weakened in Tandem, Supply-Demand Weakness Persisted

During the National Day holiday, China's cobalt spot market was closed with quotations suspended, while markets outside China and China's electronic trading continued to operate. The holiday market overall presented a pattern of "synchronized price weakness with no improvement in fundamentals": the volume-driven rebound in electronic trading on the last trading day before the holiday failed to sustain, MB cobalt prices pulled back slightly, and the existing pattern of supply contraction and weak demand remained unchanged throughout the holiday.

I. Price Review: September 30 Rebound Failed to Sustain, Domestic and Overseas Markets Weakened in Tandem

On September 30, Wuxi stainless steel exchange refined cobalt prices surged on heavy volume from around 253,000 yuan/mt, with a single-day gain of approximately 3%, briefly reclaiming the 260,000 yuan/mt level. However, this rebound was essentially a concentrated play by capital on policy expectations ahead of the holiday, combined with a technical correction after overselling, lacking support from spot transactions. Entering the National Day holiday, futures prices declined in a stepwise manner, gradually giving back the rebound gains as the market returned to weakness.

The overseas market echoed this performance. During the holiday, MB cobalt prices were generally weak, with standard-grade cobalt high-end quotes cumulatively pulling back $0.45/lb, while alloy-grade cobalt saw catch-up declines at the end of the holiday (October 6), with low-end quotes dropping $0.4/lb in a single day. The domestic and overseas markets shifted from brief divergence before the holiday to synchronized weakness, indicating that without new positive catalysts, prices continued to move along the existing downward channel.

II. Raw Material Side: Floor Price Anchored at Low-End Quotes, DRC Policy Expectations Cooling

The cobalt intermediate products market remained in stalemate during the holiday. Cobalt hydroxide (CIF China) low-end quotes held at $14.5/lb throughout the holiday, exactly matching the floor purchase price announced by top-tier players outside China before the holiday, with the floor measure providing some support to the price bottom; however, high-end quotes pulled back $0.5/lb, and the market center continued to drift lower. MHP cobalt payables held steady in the 57.5%-63% range during the holiday, with no new changes on the cost side.

The policy front deserves separate mention. The DRC quota policy adjustment expectations that the market traded on before the holiday received no new information during the holiday. Reviewing the DRC's policy trajectory: in February 2025, the country suspended cobalt exports; from October 2025, it shifted to an export quota system, with an annual export cap of 96,600 mt, nearly halving 2024 export volumes—policy tools have already been used quite fully. With the current quota system operating normally, the likelihood of further tightening in the short term is declining, and the policy imagination space that supported the futures rebound before the holiday is fading.

III. Fundamentals: Weak Supply and Demand Pattern Persists, Post-Holiday Production and Schedules Under Pressure

On the supply side, domestic smelters generally suspended quotations during the holiday, leaving the spot market in a vacuum, but contraction signals were already clear before the holiday: mainstream cobalt sulphate smelters largely suspended quotations before the holiday; production cuts and suspensions in the Co3O4 industry continued to expand, with October production expected to decline further; cobalt chloride enterprises cut production and destocked, with non-integrated enterprises finding it nearly impossible to secure spot order transactions.

The demand side was equally lackluster. Ternary cathode precursor production schedules trended downward; for October and Q4 orders, downstream enterprises showed weak acceptance of higher payables, and combined with weakening nickel and cobalt salt prices, October order payables are expected to decline; the LCO "September peak season" has definitively failed to materialize, with cathode enterprises maintaining produce-based-on-sales; hard alloy enterprises took holidays successively after the Mid-Autumn Festival, with high-priced inventory destocking proceeding slowly and new purchases repeatedly postponed. During the holiday, no incremental information emerged from China's consumption side that could alter expectations.

IV. Market Outlook: Consolidate on a Subdued Note Unchanged, Three Verification Points to Watch After the Holiday

Overall, the cobalt market returning from the holiday shows no improvement in fundamentals compared with before the holiday, and has instead lost a layer of protection from policy expectations. The September 30 rebound has already proven that capital pulses cannot substitute for demand recovery; with DRC policy expectations cooling, the market lacks new positive catalysts to trade in the short term. Post-holiday market focus centers on three areas: whether downstream enterprises can release substantive restocking after returning from the holiday, whether the intermediate product floor purchases can be executed, and the direction of price adjustments when smelters that suspended quotations resume quoting. Until these signals provide positive answers, cobalt prices will continue to seek a bottom slowly along the weak channel.

SMM Cobalt Analyst Xiao Wenhao 16621140365/ 021-51666872

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