This week, China's cobalt market continued to trend downward overall, but the pace of decline diverged significantly across products: refined cobalt slowed its decline and gradually stabilised on the back of news-driven support, while cobalt sulphate and cobalt powder continued to fall rapidly, with price centers dropping another notch. The vacuum in the cobalt intermediate product market persisted.
Refined cobalt was the only product to hit the "brakes" this week. Last Friday, futures continued to slide under the weight of bearish sentiment, but stabilised gradually as this week began, consolidating narrowly around 230,000 yuan/mt. The stabilisation was catalysed by two pieces of news: September import data for cobalt intermediate products and refined cobalt released this week both came in at low levels, easing market concerns over supply pressure; mid-week, rumours of impending MHP production cuts further restored market confidence. On the spot side, mainstream smelters cut their Ex-works prices twice this week, with the latest level down to 235,000 yuan/mt. Other smelters largely suspended quoting due to severe losses. Traders maintained basis for low-end brands at around 2,000-3,000 yuan/mt, while premiums for mainstream brands faced downward pressure as Ex-works prices were lowered. Downstream procurement remained need-based, with no signs of incremental buying.
The vacuum on the raw material side remained unchanged, but customs data provided a footnote to this vacuum. In September, China's imports of cobalt hydrometallurgy intermediate products were approximately 14,000 mt in physical content, up 78% MoM. While this appeared to be a sharp rebound, structurally, the share of bonded logistics jumped from 46.8% to 65.5%, while Ordinary Trade was basically flat MoM—arrivals were mainly placed into warehouses for observation. "Arrival at port does not equal circulation," and the volume actually entering China's domestic circulation was quite limited. Cumulative imports from January to September were still down 80% YoY. The supply loosening was deposited outside the visible market in the form of bonded inventory. In the spot market, miners held back cargoes and smelters stayed on the sidelines, with the standoff still awaiting substantive transactions to break.
The cobalt sulphate market entered a new price range this week. Mainstream smelter quotes fell to above 43,000 yuan/mt, with some traders under cash-flow pressure selling small volumes at around 40,000 yuan/mt. During the week, rumours of cargoes below 40,000 yuan/mt also circulated, though SMM has not yet verified them. The divergence on the cost side—"one stable, one falling"—is worth noting: MHP cobalt payables held steady at around 54% of metal price, supported by production cut rumours, corresponding to a spot production cost of approximately 45,000 yuan/mt. On the recycling side, cobalt payables were sharply lowered, dragged down by weak cobalt salt prices. LCO battery black mass payables fell to around 60%, and ternary battery black mass payables dropped to 66%. Some enterprises now face spot production costs of only around 40,000 yuan/mt. The downward shift in the cost curve objectively left room for cash-strapped enterprises to sell at lower prices, and 40,000 yuan/mt is becoming a new psychological level for both bulls and bears.
The decline in cobalt powder accelerated further this week. Smelter quotes were lowered to 290,000-310,000 yuan/mt, with actual transactions falling to around 285,000 yuan/mt. Some downstream buyers even reported hearing of cargoes at 250,000-260,000 yuan/mt, though SMM has not yet verified them. More noteworthy is the failure of cost transmission: market rumours suggest cobalt carbonate prices upstream have already appeared at 120,000 yuan/mt, but even based on this calculation, the spot production cost of cobalt powder remains as high as 280,000 yuan/mt. Low-priced upstream raw materials hold no practical significance for cobalt powder producers. The only glimmer of hope on the demand side came from an adjacent market: tungsten carbide prices recently showed signs of stopping falling. If they can hold, some downstream clients may consider small-volume procurement in November.
Looking at the week as a whole, the warm breeze from the news flow stood in stark contrast to the chill in fundamentals: low imports and production cut rumours gave refined cobalt a breather, but the accelerating declines in cobalt sulphate and cobalt powder show that the fundamental contradiction of absent demand has not eased.
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
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