【SMM Analysis：Weak Spot Order Demand and Losses Limit Downside Room for Cobalt Sulphate Prices】

In November 2024, the average spot price for cobalt sulphate was 27,200 yuan/mt, down 3% MoM and 25% YoY. Despite a brief surge in large-volume transactions mid-month, the overall spot market for cobalt sulphate only experienced a minor temporary increase due to high in-plant inventory levels and muted demand, coupled with a calm disposition among cobalt sulphate smelters.

From a supply and demand perspective, November saw a focus on destocking cobalt sulphate in China. There was a slight recovery in demand for ternary cathode precursors downstream, and an increase in the proportion of integrated self-supply, which limited the incremental demand in the cobalt sulphate bulk market. Additionally, with significant inventory pressure at cobalt sulphate smelters and cobalt sulphate prices experiencing low-level fluctuations, there was an increase in stockpiling demand for Co3O4 and refined cobalt.

Cost side, the average spot cost of cobalt sulphate in November 2024 was 27,639 yuan/mt, down 0.3% MoM from October; the average spot profit was -1,422 yuan/mt, down 83% MoM from October.

Entering December, there is still some downward room for raw material prices. From the perspective of the spot market, due to significant restocking in November, the overall bulk trading volume in December may not be widely stimulated. Additionally, as year-end approaches, it is the period for long-term contract negotiations, hence the pressure on prices for ternary cathode precursors downstream remains. With cobalt sulphate market experiencing oversupply, support for prices may be challenging. It is anticipated that with the trend of synchronized declines in raw material prices, the cost and profit margins for cobalt sulphate may remain stable.