[SMM Cobalt Morning Meeting Summary] Market prices rebound, fundamentals under pressure, supply-demand tug-of-war continues to intensify

Refined cobalt:

The refined cobalt market saw a notable recovery this week, with e-disc prices rebounding quickly from around 200,000 yuan/mt, touching a weekly high of 238,000 yuan/mt before consolidating around 230,000 yuan/mt. The rebound early in the week was driven by bullish news and capital inflows, validating the support near the 200,000 yuan/mt level seen previously. However, the rapid price recovery was not accompanied by any substantive change in fundamentals. On the demand side, downstream enterprises continued to make just-in-time procurement, with limited follow-through in transactions. On the supply side, mainstream smelters raised their Ex-works prices to 240,000 yuan/mt, while other smelters generally maintained quotes at a slight premium to the basis. Worth noting is the shift in supply pace—refined cobalt production has recovered rapidly since October, and based on current production resumption plans at some enterprises, output pressure will gradually become more evident going forward. With the supply-demand pattern shifting back toward inventory buildup, and with enterprises purchasing low-priced cobalt salts for toll processing into refined cobalt while hedging on futures, the sustainability of this rebound remains to be seen.

Intermediate products:

The cobalt intermediate products market was little changed this week, with the price center continuing to drift lower.On the supply side, miners' pricing strategies were basically consistent with last week. Domestic miners maintained their target prices near $11-12/lb, while ex-China miners' asking prices remained relatively high. On the demand side, smelters' purchase willingness showed no improvement. Based on current cobalt salt and refined cobalt prices, downstream raw material procurement prices would still need to be near $10/lb to avoid losses in immediate production, leaving a psychological price gap between buyers and sellers. Two developments this week are worth noting: first, market talk began circulating about transactions below $10/lb, with the boundary of low-price deals still being tested; second, some Chinese-funded miners are conducting tenders this week, and the actual transaction results will provide an important reference for gauging the market's true acceptance at current levels.

Cobalt sulphate:

The cobalt sulphate market consolidated this week, with prices showing some signs of recovery.As refined cobalt prices rebounded sharply, sentiment in the cobalt salt market was lifted. Smelters returned their quotes to around 43,000-45,000 yuan/mt, and some enterprises that had previously sold at lower prices also brought their selling price intentions back above 40,000 yuan/mt. The demand side, however, failed to follow suit. Downstream purchase price intentions remained concentrated near 40,000 yuan/mt, and most enterprises' acceptance levels did not improve despite the improved sentiment. With offers moving higher while bid prices stayed put, the gap between buyers and sellers did not truly narrow. Whether this round of price recovery can continue ultimately depends on whether downstream players are willing to take orders at the new prices.

Cobalt chloride:

Cobalt chloride quotes halted losses and steadied early this week, but what supported prices was not demand—it was news flow.Early in the week, refined cobalt futures rallied sharply. Suppliers' willingness to sell at low prices visibly receded, previously price-suppressing cargo was withdrawn from the market, and quotes generally held firm. However, this boost largely stayed at the sentiment level and did not translate into actual cobalt chloride transactions, with trading quickly returning to a wait-and-see mode. On the supply side, producers' willingness to hold prices firm strengthened from earlier, but with no transactions to back it up, the firmness in quotes was more of a posture. On the demand side, downstream Co3O4 inventories remained at relatively high levels, purchase willingness was low, and the gap between their psychological price levels and current quotes persisted, leaving actual transactions few and far between. It is clear that this week's changes occurred only in sellers' quoting behavior, while buyers' decision-making basis remained unchanged. In the short term, a sentiment-driven boost can hardly substitute for actual demand. If downstream destocking shows no significant progress, cobalt chloride prices may still face renewed downward pressure.

Cobalt salts (Co3O4):

Co3O4 prices shifted from prior weakness to stability this week, with signs of recovering market sentiment—though the recovery is so far reflected only in willingness, not yet in transactions.Early in the week, the sharp rally in refined cobalt futures lifted downstream sentiment. Cathode plants' purchasing sentiment clearly recovered, and multiple enterprises began contacting Co3O4 producers to negotiate locked orders. The intended volumes were not small, but most remained at the negotiation stage and had yet to be finalised. Some cathode plants judged that prices had reached a low and that bearish factors were largely priced in, shifting toward expectations for price hikes and loosening their reluctance to buy. On the supply side, producers' quotes were broadly stable, and their willingness to hold prices firm strengthened in tandem. In the short term, Co3O4 prices are expected to move sideways. If the locked orders under negotiation can be finalised and purchasing sentiment persists, prices are likely to find support.

Cobalt powder and others:

The cobalt powder market showed signs of stabilising this week, with smelter quotes holding at 270,000-290,000 yuan/mt.Driven by higher refined cobalt prices, low-priced cobalt powder cargo in the market decreased, and previous low-price transactions rebounded to near 260,000 yuan/mt. Some positive changes emerged on the demand side: since mid-to-late October, tungsten carbide prices—another major raw material for cemented carbide—have steadied and rebounded. Combined with signs of stabilising cobalt powder prices this week, downstream enterprises' purchase intentions increased. However, some top-tier downstream players still hold relatively ample inventories, and downstream procurement for the rest of the year is expected to remain largely just-in-time. Only after inventories are fully digested is the procurement pace likely to return to normal. Price stabilisation and recovering purchase intentions are two marginal improvements in this week's cobalt powder market, but moving from "intention" to "orders" will require time for downstream inventory digestion.

Ternary cathode precursor:

Ternary cathode precursor prices weakened this week, with nickel sulphate prices softening during the week while cobalt sulphate and manganese sulphate prices held steady.

On discounts, for November and Q4 orders, precursor coefficients trended lower overall due to the weak performance of nickel and cobalt salts. On long-term contracts, although some top-tier players still showed willingness to hold prices firm, downstream acceptance of coefficients for quarterly contracts was weak, and Q4 long-term contract coefficients are expected to be in the doldrums. On spot orders, some producers faced weak downstream demand, while others sought customer-supplied nickel and cobalt salts. November order coefficients are expected to decline as well.

On production, some producers' operating rates will pull back from next month due to export orders; some domestic top-tier producers also saw operating rates decline from Q3 highs due to end-use demand falling short of expectations, dragging overall industry production schedules lower.

Looking ahead, sulphate prices have yet to show a clear rebound, and new order prices going forward will depend on actual downstream demand in Q4.

Ternary cathode material:

Ternary cathode material prices extended their weakness this week, though the pace of decline slowed.From the raw material side, nickel sulphate prices were basically flat, cobalt sulphate and manganese sulphate prices held steady, and lithium carbonate and lithium hydroxide prices ground lower mildly with visibly narrowing declines, driving ternary cathode material prices slowly lower at low levels. In November, ternary market orders showed no significant change, with demand remaining weak. In the EV market, sales of mid-to-high-end car models have been lackluster in recent months. Although automakers have incentives to push volumes at year-end, weak domestic demand makes it difficult for sales to outperform expectations. Ex-China EV market remained at high levels in November, but a seasonal pullback is expected in December. While policy changes such as export restrictions on Chinese-European hybrid vehicles and reductions in auto export tax rebates are taking place, they mainly drive LFP market orders and have minimal impact on ternary demand. In the consumer market, with raw material prices grinding lower, downstream purchasing sentiment remained cautious and largely just-in-time. Cathode plants also avoided holding excessive inventories, basically maintaining supply security.

LCO:

China's LCO market extended its weak trend this week, with industry fundamentals clearly under pressure.In the upstream raw material segment, Co3O4 and lithium carbonate prices remained at low levels, exerting downward pressure on LCO quotes. On the supply side, facing insufficient orders, mainstream domestic LCO producers generally adhered to a conservative production schedule of producing based on sales, proactively controlling output. Industry production pulled back from earlier levels, with voluntary supply-side contraction offsetting demand pressure. However, the demand side showed no improvement. Shipments of traditional consumer electronics such as mobile phones, tablets, and portable energy storage devices remained weak. Downstream battery cell enterprises saw limited order growth, generally maintained low inventory operations, kept a slow procurement pace, and only followed up on just-in-time orders as needed, with little willingness to stockpile proactively. The industry chain's overall destocking process remained slow, and the supply-demand imbalance had yet to ease. The combination of falling raw materials and sluggish end-use demand continued to weigh on LCO prices. At present, LCO prices are on a downward consolidation trend. In the short term, before downstream consumer demand shows clear signs of recovery, LCO prices still face downside risks. A turning point will require improved end-user shipments and the start of concentrated downstream restocking.

News:    

[MIIT: Public consultation on the Interim Provisions on Digital Identity Management for New Energy Vehicle Power Batteries (Draft for Comment)] To implement the Action Plan for Improving the NEV Power Battery Recycling and Utilization System and the Interim Measures for the Management of Recycling and Comprehensive Utilization of Retired NEV Power Batteries, strengthen full-chain supervision of NEV power batteries, and enhance power battery recycling and utilization capabilities, the Ministry of Industry and Information Technology has drafted the Interim Provisions on Digital Identity Management for NEV Power Batteries and is now soliciting public comments.

[Industry insiders optimistic about China-Europe battery industry cooperation prospects] The 6th Hungary Battery Day conference opened on the 4th in Debrecen, eastern Hungary. Industry participants at the event said Chinese enterprises' investment and technological advantages will bring important opportunities for the development of Europe's battery industry, and that China and Europe should strengthen cooperation to boost industrial competitiveness and sustainable development. Ilka von Dalwigk, Secretary General of the European Association for Advanced Rechargeable and Lithium Batteries, said in an interview with Xinhua News Agency that China is at the forefront of battery technology, and China-Europe cooperation provides a good opportunity for Europe to learn from China's technology and experience. Oskaras Alsauskas, an energy modeler at the International Energy Agency, said the development of the EV and energy storage industries will continue to drive battery demand growth, and the regional distribution of demand will become more diversified. The battery industry not only provides key support for the electrification of energy, but also brings important development opportunities for emerging industries. (Xinhua News Agency) (Jin10 Data APP)

[Five ministries: Vigorously promote the recycling of solid waste such as PV, lithium-ion battery and NEV, and build a full life cycle management system for NEV power batteries] Five ministries issued the Action Plan for Implementing the Comprehensive Conservation Strategy. It mentions accelerating the improvement of resource utilization levels. Vigorously promote the recycling of solid waste such as PV, lithium-ion battery and NEV, build a full life cycle management system for NEV power batteries, and improve regulations for the retirement of wind power and PV equipment. Accelerate the deployment of a batch of rare and precious metal resource recycling projects, and promote the recovery and high-value utilization of valuable components. Promote the recycling of waste plastics and waste textiles. By 2030, the annual utilization of bulk solid waste will reach approximately 4.5 billion mt. (Jin10 Data APP)

Data source statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM's internal database models, and are for reference only and do not constitute decision-making advice.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Lin Ziya 86-2151666902

Feng Disheng 021-51666714

Lyu Yanlin 021-20707875

Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

Wang Jie 021-51595902

Zhang Haohan 021-51666752

Chen Bolin 021-51666836

Xu Mengqi 021-20707868