【SMM Analysis】Cobalt Market Rebounds Post-Holiday, Tight Supply Fuels Bullish Outlook

Refined Cobalt:
This week, spot prices for refined cobalt rebounded from previous lows. Supply side, mainstream smelters steadily raised their ex-works quotations in line with the increase in electronic trading prices. Traders' spot-futures price spreads generally held steady, with spreads for regular brands maintained at discounts of around 2,000 yuan/mt to parity, while spreads for high-end brands remained at premiums of 4,000-6,000 yuan/mt. Demand side, downstream enterprises had just resumed production in the first week after the holiday, mostly adopting a wait-and-see attitude, and actual market transactions had not yet shown a significant increase. The rebound in refined cobalt prices this week was mainly driven by two factors: first, domestic refined cobalt prices had been lower than overseas market prices for an extended period before the Chinese New Year, creating a need for price spread correction; second, recent news that some overseas companies plan to purchase refined cobalt boosted market sentiment. From a fundamental perspective, cobalt intermediate product raw materials have still not arrived in large volumes at ports, and the structurally tight supply of upstream raw materials has not fundamentally changed, which continues to provide some support for cobalt prices. Looking ahead, as downstream enterprises' restocking demand is gradually released, refined cobalt prices are expected to still have upside room.

Cobalt Intermediate Products:
This week, the cobalt intermediate products market continued to hold up well. Supply side, it is understood that export procedures in the DRC remain relatively cumbersome, and miners have not yet achieved large-scale shipments. Suppliers' expectations for price increases have strengthened, leading them to continue suspending external quotations. Demand side, as time passes, the issue of raw material shortages for domestic smelters has become increasingly prominent. Although some enterprises have purchase willingness, due to the inability of the supply side to guarantee stable shipments and the lack of clarity in downstream orders, smelters are exercising caution in procurement amid uncertainties on both the purchasing and sales sides. Actual market transactions remain sluggish, continuing a state of "price without market." Overall, the current export progress of cobalt intermediate products is slow, and the timeline for large-scale arrivals at ports may continue to be delayed. The structurally tight supply of domestic cobalt raw materials could further intensify. It is expected that after downstream orders gradually become clear post-holiday and smelters initiate a new round of procurement, intermediate product prices will still have upward momentum. Subsequent attention should be paid to the progress of DRC exports and the pace of downstream demand recovery.

Cobalt Sulphate:  
This week marked the first trading week after the Chinese New Year. The spot cobalt sulphate market performed sluggishly overall, with prices remaining stable. In terms of supply, most smelters had just resumed operations, and market sentiment remained dominated by a wait-and-see attitude. Producers continued to suspend quotations, leading to relatively tight spot availability. On the demand side, logistics had not fully recovered in the first week after the holiday, and downstream enterprises also adopted a wait-and-see stance. Actual transactions were limited, and overall market activity was subdued. Looking ahead, logistics are expected to gradually return to normal after the Lantern Festival. Coupled with downstream enterprises' inventory levels pulling back to near safety thresholds, restocking demand is anticipated to be released gradually. Against the backdrop of phased supply tightening and sustained raw material cost support, cobalt sulphate prices are expected to resume an upward trend.