SMM Cobalt Morning Briefing: This week, the cobalt industry chain remained in the doldrums overall, with market transactions generally sluggish. Refined cobalt returned to grinding lower, and despite smelters raising EXW prices to 390,000 yuan/mt, downstream only maintained just-in-time procurement, affected by the summer break and traditional consumption off-season; cobalt intermediate product prices were temporarily stable, while the disagreement between miners holding prices firm and smelters’ low-price procurement remained significant. Demand for cobalt sulphate, cobalt chloride, and Co3O4 all saw no significant improvement, with downstream inventories ample, and restocking may have to wait until after August. Mainstream cobalt powder transaction prices fell to 460,000 yuan/mt, with some low prices reaching 440,000–450,000 yuan/mt. The market remained in a weak stage of seeking a bottom.

[SMM Cobalt-Lithium Morning Briefing: This week, prices in the new energy industry chain continued to diverge. The lithium industry chain was generally weak. The transaction center of lithium ore shifted lower alongside lithium chemical prices, and lithium carbonate fell to around 150,000 yuan/mt. Downstream firms bought the dip at low price levels, but upstream producers held prices firm and held back from selling, intensifying the market tug-of-war. Lithium hydroxide transaction prices declined in tandem, and overall trading remained sluggish. In the cobalt industry chain, demand was weak. Refined cobalt, cobalt sulphate, and cobalt chloride all lacked effective transaction support, while prices of intermediate products and Co3O4 temporarily held steady. Nickel sulphate inventory continued to decline, but downstream stockpiling willingness was insufficient, and prices still faced pressure.]

Key Takeaways Recycling supply outpaces expectations. China's recycled cobalt supply is projected to reach 45,000–50,000 tonnes of contained cobalt in 2026, meeting approximately 35% of domestic refined cobalt consumption and emerging as the largest marginal increment on the supply side in H1. LCO is being rapidly displaced by NCM cathode materials. Some smartphone batteries have adopted an LCO-NCM blend (8:2 ratio), and the advancement of silicon-carbon anodes is closing the energy density gap — leaving mid-to-high-end consumer electronics as potentially the last remaining stronghold for lithium cobalt oxide (LCO). Severe inventory overhang in the consumer supply chain. Inventories across the consumer value chain (from cobalt salts to battery cells) exceed the normal restocking cycle by roughly 11,000 tonnes of contained cobalt. This "dammed lake" effect is the primary factor suppressing prices. End-market demand squeezed by dual cost pressures. Chip price hikes are raising finished-device costs, while cobalt and lithium price increases are elevating battery costs. No inflection point expected in H2 2026; 2027 hinges on foreign miners' shipment strategies. The oversupply regime will persist in H2 2026, keeping prices under pressure. In 2027, if foreign mining companies proactively curtail shipment volumes, a price turnaround window may emerge between late 2026 and early 2027. Part I: H1 2026 Retrospective Part II: H1 2026 Segment-by-Segment Review Part III: H2 2026 Segment-by-Segment Outlook Part IV: Supply-Demand and Price Forecast I. H1 2026 Retrospective Entering late 2025, market sentiment was uniformly bullish — cobalt prices and consumer electronics demand were both at cyclical highs. In Q1 2026, as DRC intermediate product exports remained persistently sluggish, confidence in further price appreciation ran high. However, by March and April, inventory across the value chain failed to decline as expected; instead, stocks remained stubbornly high despite destocking efforts , and prices began to show early signs of softening. Looking back today, two structural shifts have reshaped the market: recycling has expanded supply, while substitution has eroded demand — and both ultimately manifest in inventory accumulation. Several key developments were not fully anticipated at the time: 1. The Surge in Recycled Cobalt Supply In 2025, China's recycled cobalt supply stood at just over 20,000 tonnes of contained cobalt. In H1 2026 alone, recycled cobalt output reached 21,000 tonnes, with full-year projections now at 45,000–50,000 tonnes — enough to satisfy 35% of China's total cobalt demand. This is an extraordinarily large increment. Although recycled cobalt salt production had already reached 3,200 tonnes of contained cobalt by December 2025, the market did not pay sufficient attention at the time. In hindsight, that was only the beginning. Two factors underpin this faster-than-expected recycling ramp-up: Policy drivers: In October 2025, China liberalized the import and export of black mass (battery powder). Early on, market participants were still navigating the new regulatory framework, and no one could confidently forecast how much material would enter the system or how much recycled output it would generate. Internal waste recycling loops: Approximately 70% of current black mass originates from production scrap generated during cell manufacturing. A significant portion of this material does not circulate in the open market; instead, it is consumed internally through direct partnerships between cell manufacturers and upstream recyclers. The combination of these two factors has driven recycled cobalt supply far beyond initial expectations. 2. LCO-to-NCM Substitution In 2025, LCO demand totaled 124,000 tonnes. Even under relatively optimistic assumptions, we now forecast only 96,000 tonnes for 2026 — representing a decline of 17,000 tonnes of contained cobalt demand. This contraction reflects both sluggish end-market consumer electronics demand and the accelerating substitution by NCM cathode materials. Previously, I estimated that for a 20Wh battery, LCO costs roughly RMB 5 more than NCM — a seemingly trivial difference. Based on that figure, I believed 3C electronics would remain the core demand base for LCO, and that such a small cost gap would not meaningfully displace LCO in consumer applications. At the time, I only downgraded LCO demand projections for PCs and tablets. However, the pressure to reduce battery costs has pushed all manufacturers to seriously evaluate NCM alternatives. In H1 2026, several smartphone OEMs launched pure NCM battery programs, and a growing number of devices adopted LCO-NCM blended chemistries (80% LCO / 20% NCM) to cut costs. One might ask: what about energy density? NCM intrinsically offers lower energy density than LCO — but silicon-carbon anode technology is advancing rapidly. Mature commercial solutions now achieve silicon content above 30%, delivering up to 40% higher energy density, while adding less than RMB 2 to the anode cost per cell. Silicon-carbon anode progress has effectively closed the energy density gap that once favored LCO. Let us run the numbers. LCO requires 1,400–1,800 tonnes per GWh, depending on operating voltage. High-voltage NCM 6-series requires approximately 1,700 tonnes per GWh — so the mass per GWh is comparable. The difference in cobalt content, however, is dramatic: LCO contains 60% cobalt, while NCM 6-series contains only 6.9%. This means every unit of LCO displaced by NCM reduces cobalt demand by a multiple. When cost reduction and performance preservation can be simultaneously achieved, mid-to-high-end consumer products may be all that remains of LCO's core market. 3. Inventory Dynamics The inventory issue must be examined on two levels: the pace of aggregate destocking , and the structural distribution of inventories across segments. On the aggregate level, new supply additions coincide with contracting demand, continuously slowing the pace of destocking across the value chain. The market had expected effective inventory digestion by Q1, but in practice, stocks were never meaningfully reduced. What has exerted sustained downward pressure on prices, however, is the structural dimension. While inventory levels in other end-markets remain broadly within reasonable ranges, consumer-segment inventories are clearly elevated. Across the entire consumer value chain — from cobalt salts to cells — normal stocking-cycle inventory would be approximately 14,000 tonnes of contained cobalt; current estimates place it closer to 25,000 tonnes. In Q1, sentiment remained relatively optimistic, and concerns over DRC intermediate product export disruptions created a "supply shortage" narrative that partially offset the high-inventory overhang. Prices held steady and market liquidity remained adequate. Entering Q2, however, the reality of weak end-market demand became increasingly clear, and forward expectations were steadily revised downward. At that point, high inventory ceased to function as a buffer and became an inventory overhang (the "dammed lake" effect) — downstream buyers slowed procurement, caution prevailed, market liquidity contracted rapidly, and prices weakened noticeably. Inventory itself is not the problem. The danger lies in high inventory coinciding with a shift in sentiment from optimism to pessimism — at which point every tonne of stock becomes additional weight on prices. II. H1 2026 Segment-by-Segment Review 1. Consumer Market: Price Hikes Suppress Demand; Production Contracts in Tandem 1) Smartphones From a production standpoint, the smartphone segment has performed relatively well within consumer electronics this year — even better than many had anticipated. In H1 2026, China's cumulative mobile phone output (including smartphones and feature phones) reached 689 million units, a decline of approximately 1.4% from 699 million units in H1 2025, marking the entry of production into contraction territory. Rising chip prices have steadily pushed up finished-device costs, forcing OEMs to raise end prices and further dampening consumer replacement willingness. The Q2 trajectory tells the story: Q1 managed a modest 1.7% increase on a low base, but Q2 dropped to -4.5%, with the decline accelerating sharply within a single quarter. Weak end-market sell-through has transmitted upstream to production scheduling faster than expected. Structurally, smartphones continued to grow, reaching 578 million units in H1, up approximately 4.0% year-on-year. Feature phones, by contrast, contracted sharply to 110 million units, a decline of over 22%. Smartphone share rose from 79.6% in H1 2025 to 83.9%, reflecting ongoing industry consolidation toward smartphones. However, this growth is driven primarily by the continued conversion of feature-phone users and proactive product-mix adjustments by OEMs — not by expansion of overall demand. In summary, H1 data confirms the smartphone industry has entered a downward trajectory, with the Q2 acceleration a notable warning signal. Under the dual pressure of rising costs and weak end demand, H2 output will likely continue to contract year-on-year. 2) Microcomputers (PCs & Tablets) If the smartphone market can be described as "mildly impacted," the computer market tells a different story entirely. In H1 2026, China's cumulative microcomputer (PC and tablet) output reached 150 million units, a decline of approximately 9.4% from 166 million units in H1 2025 — significantly steeper than the 1.4% drop in mobile phones. PCs and tablets already have long replacement cycles; chip-driven cost increases have further reduced upgrade incentives, leaving output with nowhere to go but down. Moreover, the contraction has been remarkably uniform: both Q1 and Q2 registered -9.4% declines. This consistent, sustained contraction points to a structural step-down in demand rather than seasonal fluctuation. What is more concerning is that the sector was still growing in H1 2025 (+5.8%) before reversing so sharply this year — suggesting the industry is not merely "adjusting" but retreating. Against the broader backdrop of soft 3C consumption, H2 output is expected to remain in negative territory, with the full-year contraction widening further. 2. Lithium Cobalt Oxide (LCO) Cathode Materials Upstream materials have held up somewhat better than end products. In H1 2026, domestic LCO cumulative output reached approximately 49,200 tonnes, down about 2.3% from 50,300 tonnes in H1 2025 — a decline notably smaller than that of smartphones and computers. This is not necessarily good news. Quarterly breakdown: Q1 output totaled approximately 25,900 tonnes, down a marginal 1.7% year-on-year and essentially flat with the prior year. Q2 output fell to approximately 23,200 tonnes, with the year-on-year decline widening to roughly 10.4%. Entering Q2, the pressure of weak end demand began to transmit clearly upstream, and manufacturers adopted more cautious production scheduling. Industry operating rates tell the same story: the monthly average operating rate in H1 2026 was approximately 52%, down from about 56% in H1 2025. Q2 monthly operating rates hovered between 48% and 52%, compared with 57%–68% in the same period of 2025 — a gap of nearly 15 percentage points in operating rates, representing genuine production cuts. The competitive landscape is also shifting. The CR3 concentration ratio for LCO cathode materials rose from 73.2% in H1 2025 to 77.0% in H1 2026, with the leading producer's share expanding from 51.2% to 57.8%. Amid contracting downstream demand, leading players — leveraging technological advantages and deep industrial partnerships — are squeezing smaller manufacturers, reinforcing industry consolidation. Overall, the LCO market in H1 was characterized by both supply and demand remaining subdued . Output declines reflect proactive supply-side contraction in response to soft downstream demand, while rising concentration indicates that industry leaders are accelerating market share gains during this adjustment cycle. 3. Cobalt Tetroxide (Co₃O₄) If LCO's performance was merely "not great," cobalt tetroxide (tetra-cobalt) has been the worst-performing segment. In H1 2026, domestic cobalt tetroxide cumulative output reached approximately 42,900 tonnes, down 21.3% from 54,500 tonnes in H1 2025. Why such a steep drop? The problem is not with tetra-cobalt producers themselves — it is demand. Downstream players began stockpiling late last year, and by H1 2026 many held more inventory than they needed. As tetra-cobalt accumulated downstream, cathode material plants eventually stopped taking delivery entirely. Quarterly breakdown: Q1 output totaled approximately 22,800 tonnes, down 8.8% year-on-year, with material producers still carrying high inventories and procurement appetite already weakening. Entering Q2, material plants accelerated destocking, and tetra-cobalt output plummeted to approximately 18,100 tonnes — a year-on-year decline of 39.4%. Industry concentration has also intensified. CR3 rose from 67.4% in H1 2025 to 72.8% in H1 2026, with CNGR (Zhongwei) capturing roughly one-third of the market and cementing its leadership position. As downstream procurement contracts sharply, orders are concentrating among fewer producers, and the divergence between leaders and second-tier players points to ongoing industry reshuffling. 4. Cobalt Chloride Compared with the "cliff drop" in tetra-cobalt, cobalt chloride has fared considerably better. In H1 2026, domestic cobalt chloride cumulative output reached approximately 29,500 tonnes, down 14.2% from 34,400 tonnes in H1 2025. Two factors explain this relative resilience: Diversified downstream demand: Cobalt chloride feeds not only cobalt tetroxide but also cobalt powder, additives, and chemical applications — making it less vulnerable to a single product's demand collapse. Integrated production layouts: Most cobalt chloride producers are vertically integrated, allowing them to flexibly adjust output based on downstream scheduling. Production cuts and destocking can proceed in tandem, preventing inventory pressure from accumulating excessively at any single node. Quarterly breakdown: Q1 output totaled approximately 16,300 tonnes, up 3.2% from 15,800 tonnes in Q1 2025, essentially maintaining prior-year levels. In Q2, however, simultaneous production cuts and destocking by tetra-cobalt and cathode material producers caused cobalt chloride demand to contract abruptly. Q2 output fell to approximately 13,200 tonnes, down 28.9% from 18,600 tonnes in Q2 2025 — following the same "stable first half, declining second half" pattern as tetra-cobalt. The most noteworthy development in cobalt chloride, however, is the shift toward recycled feedstock. In H1 2025, recycled materials accounted for less than 7% of total cobalt chloride output on average, peaking at just over 10%. By H1 2026, this share had jumped dramatically — reaching 54.4% in June, when recycled output surpassed primary (virgin ore) output for the first time. In the span of one year, recycled material has moved from a supporting role to the leading source. Two forces are driving this structural shift: Primary feedstock contraction: Constrained by tight intermediate product supplies, primary ore-based output fell from 5,192 tonnes in January to 1,990 tonnes in June — a decline of over 60%. Recycled feedstock expansion: With relatively stable supply and cost advantages, recycled materials are rapidly filling the gap left by declining primary production. On the inventory front, both upstream and downstream stocks have been drawn down continuously. Total inventories fell from 9,356 tonnes in January 2026 to 6,180 tonnes in May — a decline of approximately 34%. Upstream smelter inventories dropped from 5,815 tonnes to 3,745 tonnes, while downstream material plant inventories fell from 3,541 tonnes to 2,434 tonnes. Unlike cobalt tetroxide's structural mismatch — where cathode plants accumulated excess inventory while tetra-cobalt producers were forced to cut output — cobalt chloride has seen synchronized destocking across the value chain, reflecting the proactive adjustment capability of integrated production models. III. H2 2026 Segment-by-Segment Outlook The following outlook is based on the current market consensus: no significant seasonal recovery in end-market demand during H2, and the current pace of destocking continuing broadly unchanged. 1. Lithium Cobalt Oxide (LCO) For H2 2026 (July–December), cumulative LCO output is projected at approximately 47,000 tonnes, down about 36% from 74,000 tonnes in H2 2025. Monthly output is expected to range between 7,500 and 8,000 tonnes — well below the 10,000–13,000 tonne monthly range seen in H2 2025. The second half of 2025 was a period of aggressive restocking by cathode plants, with monthly output averaging 12,000 tonnes; this year, even 8,000 tonnes per month will be difficult to sustain. A lackluster peak season will define the H2 LCO market. Two core constraints are at play: End-market level: Persistently rising chip prices are inflating 3C electronics finished-device costs. Smartphone and PC OEMs have been forced to raise prices, further suppressing already-weak consumer demand. The device replacement cycle has lengthened to nearly 38 months — a historical high. Weak end-market sell-through inevitably transmits upstream. Materials level: LCO cells themselves face mounting cost pressure. While cobalt and lithium raw material prices have retreated from their early-year highs, absolute levels remain elevated by historical standards. Meanwhile, the cost disadvantage of alternative chemistries is narrowing — pushing more end-device OEMs to seriously consider NCM-blended solutions. When end demand is contracting and substitution is accelerating, downstream strategy becomes straightforward: procure as little as possible, and draw down existing inventory wherever possible. Cathode plants are unlikely to restore procurement appetite until orders pick up meaningfully and inventories return to reasonable levels — leaving LCO output with little upward momentum. For full-year 2026, cumulative LCO output is forecast at approximately 97,000 tonnes, down about 22% from 124,000 tonnes in 2025. H2 output will be lower than H1 — a reversal of the normal seasonal pattern where H2 exceeds H1. Cost-driven price increases suppressing end demand, combined with accelerating NCM substitution on the materials side — both forces will continue to weigh on LCO production through H2. 2. Cobalt Tetroxide (Co₃O₄) Assuming no meaningful seasonal recovery in end demand and destocking proceeding at the current pace, inventory normalization may not arrive until year-end. For H2 2026 (July–December), cumulative cobalt tetroxide output is projected at approximately 32,800 tonnes, down about 52.1% from 68,400 tonnes in H2 2025. Monthly output will remain in a low range of 5,200–5,900 tonnes. Even during the traditional peak season of September–December, output is forecast at only 5,200–5,900 tonnes per month — far below the 10,900–11,850 tonne range seen in the same period of 2025. For full-year 2026, cumulative cobalt tetroxide output is forecast at approximately 75,700 tonnes, down about 38.4% from roughly 122,900 tonnes in 2025. The year traces a pattern of front-loaded stability followed by a steep decline : Q1 offered brief support, output trended lower from Q2 onward, and H2 will linger at depressed levels for an extended period. The contraction effect transmits from end-market consumer electronics to cathode materials, and is ultimately amplified dramatically at the precursor stage — with inventory mismatches further magnifying the impact. The cobalt tetroxide sector will remain in a slump until industry inventories return to reasonable levels. 3. Cobalt Chloride For H2 2026 (July–December), cumulative cobalt chloride output is projected at approximately 31,000 tonnes, down about 31.4% from roughly 45,200 tonnes in H2 2025. Monthly output will stabilize in the 4,300–5,300 tonne range — a modest recovery from the H2 trough but still well below the 6,000–7,600 tonne levels of H2 2025. The recycled-material share warrants continued monitoring: recycled and primary feedstock will remain roughly balanced through H2, with the recycled share fluctuating between 50% and 55% and no further significant increase expected. Primary ore-based output will gradually recover from 1,960 tonnes in July to 2,400 tonnes in December, driven primarily by improved raw material availability as DRC intermediate products arrive at Chinese ports in H2. For full-year 2026, cumulative cobalt chloride output is forecast at approximately 60,500 tonnes, down about 24.0% from roughly 79,600 tonnes in 2025. The full-year trajectory falls into three phases: stable output in Q1, a cliff-like drop in Q2, and bottoming without meaningful rebound in H2. Compared with cobalt tetroxide's 38.4% full-year decline, cobalt chloride's contraction is relatively mild — yet both share the same trajectory of steady start, downward drift, then bottoming out . The structural shift from primary to recycled feedstock is the overarching theme for the year. IV. Supply-Demand and Price Forecast Before discussing prices, let us address raw material sources. On the supply side, there are three primary feedstocks: intermediate products , recycled materials , and MHP (mixed hydroxide precipitate) . On the demand side, consumption is distributed across several end markets: NCM cathode materials , LCO , electrolytic cobalt , cobalt powder , and other chemical applications. Different demand segments have different feedstock requirements. NCM cathode materials have the most flexible feedstock options — they can use intermediates, MHP, and recycled materials, although some producers have hard requirements for intermediates (reflected in our modeling). LCO, by contrast, can only use intermediates and high-cobalt-content recycled materials. Electrolytic cobalt and cobalt powder also rely primarily on intermediates. 1. Baseline Assumptions for Intermediate Product Imports 2026: For the 25Q4–26Q3 intermediate product quota: Chinese-funded enterprises will ship 100% of their allocation to China; foreign-funded enterprises will ship approximately 50% to China. Since unused Q2 2026 quotas have been canceled and the full extent of lost volume cannot be comprehensively tallied across individual companies, we adopt the most conservative scenario — treating Q2 quota volumes as effectively zero. 2027: For the 26Q4–27Q3 intermediate product quota: Chinese-funded enterprises will continue to ship 100% to China; the foreign-funded shipment ratio is expected to rise to 70%. Time Period Intermediate Product Supply-Demand Change Domestic Inventory Status Fundamental Assessment H2 2026 Inventory build of ~6,000 tonnes of contained cobalt Remains elevated Loose supply Full Year 2027 Inventory drawdown of ~4,000 tonnes of contained cobalt Gradually digested to normal levels Tight balance Based on these assumptions, we have modeled the supply-demand balance over the coming quarters. Under this baseline scenario, the conclusion is clear: the oversupply regime will not change in H2 2026, and prices will remain under pressure. In 2027, as inventories are gradually digested, fundamentals will shift from loose to tight-balanced, providing price support. There is, however, one easily overlooked variable in this projection — the shipment strategies of foreign mining companies . 2. Wildcard: Foreign Miners' Shipment Strategies In our baseline, we assumed a flat 50% China shipment ratio for foreign miners. But foreign miners are not a monolith — strategies vary considerably. Some prioritize rapid monetization, while others prefer to control shipment pace when prices are low. The single most critical player is the largest foreign mining company . As one of the world's largest cobalt producers, its quota accounts for approximately 60% of total foreign allocations — meaning its shipment cadence alone is sufficient to shift market balance. Breaking out foreign shipments separately: H2 2026: Foreign imports into China will total approximately 10,000 tonnes of contained cobalt. At this volume — and given today's high-inventory environment — no single foreign miner's strategy will be decisive. Q3 is seasonally a demand trough, and inventories are already elevated; continued intermediate product arrivals will only intensify price pressure. 2027: Foreign imports into China are projected at approximately 22,000 tonnes of contained cobalt. By then, the largest miner's decision weight changes fundamentally. With nearly 60% of foreign quota share, its shipment pace will directly determine whether the market remains tight-balanced or shifts into deficit. 3. A Key Observation If select mining companies begin adopting conservative shipment strategies from now — slowing delivery schedules and controlling spot market volumes — inventory drawdown could proceed faster than the baseline scenario, even accounting for the current domestic inventory of nearly 25,000 tonnes of contained cobalt. Under this path: Domestic inventories could return to relatively normal levels before year-end. Entering 2027, effective intermediate product supply would shift from "loose" to "tight." Prices may not wait for fundamentals to actually tighten before reacting — market expectations of supply tightening typically manifest in prices 1–2 months in advance. This suggests that the window between late 2026 and Q1 2027 could be the critical period when price sentiment shifts from "bearish" to "stable or even bullish." This is, of course, only one possible path. The ultimate outcome depends on the interplay of two variables: The actual shipment cadence of foreign miners (especially the strategy of the largest foreign producer). The pace of domestic high-inventory destocking (dependent on end-demand recovery and the sustainability of recycled material supply). At present, the uncertainty surrounding the former is greater than the latter. Robyn Wang +86 15927163529

I. DRC Export Quota Policy in H1 2026: Transition from Leniency to Standardization Timeline Key Policies Jan 2026 ARECOMS allowed Q4 2025 cobalt export quotas to be extended to month-end March 2026 Mar 2026 The Ministry of Finance and the Ministry of Mines introduced controls to standardize deviations in cobalt hydroxide metal content detection Apr 2026 ARECOMS allowed Q4 2025 quotas to be extended to month-end April 2026, and Q1 2026 quotas to be extended to month-end June 2026 Jun 2026 ARECOMS revoked unused H1 2026 quotas In H1 2026, the DRC government steadily advanced the standardized operation of the cobalt export quota system. Initially, due to incomplete approval processes and standards, quota issuance efficiency was low, and the government allowed miners to extend unused quotas. As procedures matured, the government gradually shortened extension periods and officially announced the revocation of all unused H1 quotas at month-end June. The DRC government has not yet clarified the carryover rules for H2 quotas, leaving the market with two expected pathways: first, following the Q1 and Q2 approach with quarterly settlements where monthly quotas within a quarter can be flexibly transferred; second, reverting to the original 2025 quota document standards with monthly settlements that strictly prohibit inter-month carryover. This policy uncertainty remains a key supply variable for H2. II. Cobalt Product Prices: Expectations Disappointed, Consolidation and Grinding Lower Through H1 At the start of 2026, the market widely anticipated that the quota system would tighten supply, providing a basis for higher cobalt prices. The actual trend proved the opposite, with overall mt in metal content prices for cobalt products drifting lower . In January, refined cobalt surged then pulled back sharply, weighed by profit-taking, weakening macro sentiment, and broad declines in base metals, before stabilizing at relatively low levels. Other cobalt products did not drop significantly due to stronger raw material cost support but lacked upward momentum and entered a sideways state. From February to March, boosted by positive news, refined cobalt prices briefly rebounded but then re-entered a grind lower channel, pressured by overseas market arbitrage activity, sluggish end-user restocking demand, and financial constraints. Downstream enterprises maintained extremely low raw material inventory, purchasing only as needed. Divergence in the cobalt salt market intensified: upstream held prices firm on bullish expectations, with only some financially constrained enterprises selling at discounts; downstream rejected high-price purchases without order backing, resulting in sluggish transactions. Prices remained broadly steady but biased weaker. From April to May, downstream production schedules and orders continued to underperform expectations. Coupled with relatively sufficient raw material inventories at most enterprises, purchase willingness remained sluggish, with only occasional small-volume deals at low prices. On the supply side, most smelters held prices firm due to high raw material costs, but some recycling smelters and traders cut prices to sell under financial pressure, causing prices to grind lower gradually. In June, the market extended its downtrend, with the price center of all products moving lower. Refined cobalt saw weak end-use demand, while some enterprises faced pressure from mid-year financial reporting and cash collection, leading to persistent selling in spot cargo and futures markets, putting notable downward pressure on prices. Cobalt salts were impacted by weakening production schedules for downstream ternary cathode precursors and Co3O4, with procurement limited to immediate needs and aggressive price pushing, causing transaction centers to decline continuously. Cobalt intermediate products weakened slightly amid the standoff between miners’ firm pricing and sluggish purchasing by domestic smelters, with the decline milder than that of cobalt salts, further squeezing smelting margins. The core logic behind the price decline was a supply-demand mismatch : On one hand, while primary raw materials remained tight, supply from recycling increased substantially. SMM data shows that China’s recycled cobalt salt production (including in-house recycling by battery cell manufacturers) was only approximately 2,000–2,500 mt in metal content in June 2025, surging to around 4,000–4,500 mt in metal content by June 2026, effectively filling the gap in intermediate products. The share of recycling in the cobalt raw material production structure rose from approximately 13% in Q1 2025 to around 34% in Q2 2026. On the other hand, demand was sluggish. SMM estimates that LCO production in 2026 is expected to decline 22% MoM, with downstream purchasing as needed and destocking proceeding slowly. The restocking rally the market had been anticipating never materialized. Against this supply-demand mismatch, the cobalt market remained buyer-dominated over the long term, with prices weakening gradually . III. China Cobalt Product Smelting Margins: Growing Divergence, All Routes Slipping into Loss-Making Territory In H1 2026, margins across cobalt products diverged significantly after a brief spike in January 2026, with most routes subsequently falling into deep losses: Cobalt Sulphate: From late January to March, after downstream restocking ended, purchase willingness weakened and the market entered a stalemate with limited transactions. Cobalt sulphate and intermediate product prices were relatively stable, with margins only affected by exchange rate fluctuations and sentiment, consolidating within a narrow loss range. From April to June, financial pressure intensified on some smelters and traders, who sold at concessions, pushing cobalt sulphate into a grinding downtrend and further compressing production margins. By month-end June, losses for the externally purchased intermediate product route for cobalt sulphate widened to approximately 8,000 yuan/mt. Smelters, aside from executing long-term contracts, showed extremely low willingness to produce for spot orders, with some enterprises maintaining production cuts or suspensions. Refined Cobalt: From mid-January, due to factors such as profit-taking and a weakening macro environment, refined cobalt prices retreated after a rapid rise, with profit margins continuously shrinking. In February–March, despite a brief rebound, prices resumed their decline under pressure from arbitrage and demand falling short of expectations. From April, some enterprises went long on China’s refined cobalt futures, which were perceived as undervalued, leading to some recovery in spot prices, but the smelting sector remained in deep losses. In May–June, cash production costs for both the externally purchased intermediate product route and the externally purchased cobalt sulphate route stabilized in the range of 450,000–500,000 yuan/mt, while spot prices lacked upward momentum due to weak end-user demand and continued position liquidation by traders, with maximum losses approaching 100,000 yuan/mt and significant industry operating pressure. Cobalt Chloride and Co3O4: Before May, downstream acceptance of high prices was low, the market was relatively calm, prices held steady, and profits were only slightly affected by exchange rate fluctuations. In May–June, intermediate product raw material prices remained firm, but some cobalt chloride and Co3O4 enterprises, under pressure from cash flow and performance, sold at lower prices, causing profits to fall sharply. Among these, downstream demand for Co3O4 was weaker, and the price cuts were larger than those for upstream cobalt chloride, resulting in a significant narrowing of profits for the route that purchases cobalt chloride externally. IV. China’s Cobalt Resource Supply-Demand Balance: Destocking Continues but Pace Slows In H1 2026, China’s cobalt resource market remained in a destocking channel, but the destocking speed gradually slowed. Intermediate Product Imports: The DRC announced a quota export policy in mid-October 2025, but due to delays in the approval process, actual imports of intermediate products into China in H1 2026 are expected to be only about 5,000 mt in metal content (with about 2,000 mt in June). MHP Imports: In February this year, a Middle East geopolitical conflict triggered a sulphur supply crisis, delaying the commissioning of new Indonesian MHP hydrometallurgical projects and reducing output from existing projects. China’s MHP imports in H1 2026 are expected to be only about 15,000 mt in metal content. Domestic Production: Against the backdrop of raw material shortages, enterprises had a strong willingness to utilize recycled materials; China’s domestic production (including domestic ore and recycling) in H1 was about 21,000 mt in metal content. Smelting Demand: Affected by raw material shortages and losses for most products, a large number of smelters cut production or suspended operations, with cobalt smelting demand in H1 at about 65,000 mt in metal content. Overall, the H1 supply-demand gap was about 23,000 mt in metal content. The destocking trend remained intact, but the marginal intensity had weakened significantly compared to H2 2025. V. H2 Outlook: Supply recovery expectations are strong, but uncertainties remain Supply side, multiple sources of incremental growth are expected in H2: high production schedules at battery cell enterprises will generate large volumes of production waste, leaving room for further increases in recycled output; while the Strait of Hormuz crisis has not been fully resolved, sulfur transportation has slowly recovered and MHP output from Indonesia hydrometallurgy plants is expected to rebound, which will drive a corresponding increase in China’s imports; moreover, quotas accumulated in Q4 2025 and H1 2026 will gradually arrive at ports, and intermediate product imports will also slowly recover. Demand side, as raw material supply improves, cobalt salt smelters will gradually resume production, and even some idled refined cobalt smelters that have been out of operation for an extended period could be restarted. However, against a backdrop of generally weak end-use demand, the incremental demand is expected to struggle to absorb the new supply, and the market may return to an inventory buildup pattern. Two major uncertainties require close attention: Sustainability of recycled output growth: The high recycled output in H1 was largely driven by strong economics, with many smelters increasing imports of overseas black mass and drawing down domestic scrap inventories. Recently, however, cobalt salt prices across grades have fallen faster than raw material prices, eroding recycling and smelting margins. If black mass imports pull back, recycled supply could fall short of expectations. Miners holding prices firm and controlling circulation volumes: Miners currently remain strongly inclined to keep prices firm. If they restrict circulation volumes to maintain prices, actual intermediate product port arrivals into China could come in below current market expectations, thereby slowing the pace of inventory buildup or even tightening the supply-demand balance again. Overall, the tug-of-war between sellers and buyers in the cobalt market will become more complex in H2 2026. The direction of supply recovery is largely certain, but the extent and pace will be heavily disrupted by policies, geopolitics, and corporate behaviors, while any demand recovery will hinge on a tangible recovery in end-use orders . Xiao Wenhao 16621140365

SMM, July 10: This week, cobalt market product prices continued to consolidate on a weak note. Although refined cobalt prices edged up by 2,000 yuan/mt, end-use demand showed no substantial improvement, and the recovery of downstream demand remains the eagerly anticipated future for the entire cobalt industry chain. Looking back at refined cobalt prices in H1 2026, despite the drag from weak downstream demand performance, the overall price center still rose significantly compared with the same period in 2025, with a YoY surge of as much as 97.22%........ SMM has compiled the price changes of cobalt series products this week and the price review of the cobalt market in H1, as follows: : According to SMM spot price data, refined cobalt spot prices edged up this week. As of July 10, spot refined cobalt prices rose to 380,000-387,000 yuan/mt, with an average price of 383,500 yuan/mt, up by 2,000 yuan/mt from 381,500 yuan/mt on July 3, an increase of 0.52%. 》View SMM cobalt and lithium spot prices Supply side, mainstream smelters slightly raised EXW prices to 390,000 yuan/mt; trader spot-futures price spreads remained in the range of parity to a premium of 10,000 yuan/mt. Demand side, downstream changes were not significant this week, with most enterprises maintaining restocking for rigid demand, and end-use demand had not yet shown substantial improvement. In the short term, with relatively weak downstream support and high industry inventory, refined cobalt prices are likely to mainly consolidate; however, for refined cobalt prices to enter a recovery path, they still depend on the upward momentum of upstream categories such as cobalt intermediate products and cobalt sulphate. Cobalt Salt ( and ): : According to SMM spot price data, cobalt sulphate spot prices remained in the doldrums this week. As of July 10, spot cobalt sulphate prices fell to 84,200-86,000 yuan/mt, with an average price of 85,100 yuan/mt, down by 900 yuan/mt from July 3, a drop of 1.05%. 》View SMM cobalt and lithium spot prices According to SMM, trading in the cobalt sulphate market remained sluggish this week, and prices returned to a weak, grinding lower trend. Supply side, quotations from primary smelters remained firm, with mainstream enterprises continuing to hold the 85,000 yuan/mt level; however, some recycled-material smelters lowered their offers again to promote shipments, and the lowest offer in the market has now fallen back to 80,000-81,000 yuan/mt. Demand side showed no significant improvement, downstream enterprises mostly scheduled production pace based on orders, and product settlements generally referenced monthly average prices. To avoid risks from spot purchase-sales price spreads, most enterprises mainly adopted a wait-and-see approach at the beginning of the month, and restocking activities will likely take place after mid-to-late July, or possibly be postponed to August. Recently, a few companies had low inventory and intended to restock, but their psychological price level was below 80,000 yuan/mt, limiting actual completion. In the short term, the cobalt sulphate price is expected to consolidate on a subdued note, and sustained recovery in the market will depend on the realization of downstream concentrated restocking demand. side: According to SMM spot price data, spot cobalt chloride quotations edged down 250 yuan/mt early in the week and then held steady. As of July 10, spot cobalt chloride was quoted steady at 102,000–104,000 yuan/mt, averaging 103,000 yuan/mt, down 0.24% from July 3. In the spot market, according to SMM, the cobalt chloride market remained sluggish this week. Inquiry activity improved slightly from the prior period, but actual concluded deals were still very limited. On the supply side, smelter quotations were broadly stable, but with no sizeable transactions, current offer prices mainly reflected seller sentiment, and their actual reference value remained to be verified. On the demand side, the “rush to buy amid continuous price rise and hold back amid price downturn” mentality continued to dominate. Downstream buyers were still assessing whether the current price plateau was a brief pause or a stage bottom, and their willingness to enter the market was low, with an overall wait-and-see sentiment remaining strong. In the short term, cobalt chloride prices are likely to move sideways, with limited downside room. side: According to SMM spot price data, spot Co3O4 quotations also stabilized temporarily after a decline on the first trading day this week. As of July 10, spot Co3O4 was quoted steady at 310,000–330,000 yuan/mt, averaging 320,000 yuan/mt, down 2,500 yuan/mt or 0.78% from July 3. From the spot market perspective, the Co3O4 market continued to be sluggish this week, and actual deals remained scarce. On the supply side, after the half-year mark, previously bearish enterprises had largely completed destocking, easing the pressure from concentrated sell-offs, and quotations stabilized. On the demand side, although downstream cathode material plants had a procurement window, during the period of continued price consolidation at lows, they were still mainly pressing for lower prices and restocking only small volumes on demand, with little willingness to increase purchases. The sluggish market continued to weigh on upstream shipment pace. In the short term, the Co3O4 price trend will remain anchored to the cobalt salt segment price direction and is expected to mainly move sideways in line with cobalt chloride. On the news front, the first half of 2026 has concluded. Reviewing the cobalt market performance in H1, although refined cobalt prices were dragged down by weak downstream demand, due to the impact of a series of measures such as the DRC's cobalt export ban previously, refined cobalt prices overall remained fluctuating at relatively high levels over the past three years. According to SMM historical prices, in H1 2026, the average spot price of refined cobalt was 424,325.43 yuan/mt, up by 209,170.73 yuan/mt or 97.22% from 215,154.7 yuan/mt in H1 2025. On a monthly basis: In January 2026, affected by profit-taking, weakening macro sentiment, and the drag from declining other metals, refined cobalt prices retreated after a rapid rise and then stabilized at relatively low levels for a long period. Supported by strong raw material costs, other cobalt products, while not declining in price, lacked upward momentum and entered a stable state. During the Chinese New Year period, affected by various bullish news, refined cobalt prices briefly rebounded; however, subsequently, under the influence of domestic and international arbitrage, low downstream stockpiling demand, and capital suppression, prices continued to grind lower, returning to low levels. End-users operated with low inventories, making just-in-time procurement only. The cobalt salt market remained divided, with upstream holders expecting price rises and unwilling to sell at lower prices, while only enterprises under capital pressure cut prices to sell. Downstream buyers were unwilling to purchase at high prices without orders, leaving the market sluggish. Prices overall remained stable. From April to May, downstream production schedules and orders fell short of market expectations. Coupled with most enterprises having relatively ample raw material inventories, purchase willingness was weak, with only small-volume procurement of low-priced raw materials. On the supply side, although the vast majority of smelters held prices firm due to high raw material cost support, some recycling smelters and traders, under capital pressure, sold at discounts, causing prices to slowly grind lower overall. Entering June 2026, the cobalt market continued to grind lower, with the price centers of various products moving further down. End-use demand for refined cobalt remained weak, and combined with some enterprises facing capital and financial report pressures, they continued to sell off in spot and futures markets, putting prices under pressure. The cobalt salt segment was affected by weakening production schedules for downstream ternary cathode precursors and Co3O4, with procurement remaining just-in-time and pushing for lower prices, causing transaction centers to continue declining. Cobalt intermediate products edged lower in the tug-of-war between miners holding prices firm and domestic smelters' subdued purchases, with a smaller decline than cobalt salts, further compressing smelting margins. Overall, the strategic supply-demand stalemate persisted: upstream cost support clashed with downstream pressure for lower prices, and some enterprises, pressured by mid-year financial reports and capital, cut prices to sell, further dragging down the market. Looking ahead to July, in the short term, downstream demand is expected to remain weak, and the high inventories still present in the market will constrain price increases. Prices may consolidate at low levels, with some speculative traders possibly selling off and exiting due to low prices. However, if other cobalt products rise, refined cobalt prices could also follow suit and increase. For more insights into the cobalt market, check out the , released by SMM in the first ten days of each month. SMM will also publish a review of the 2026 H1 cobalt market and an outlook for H2—stay tuned!

SMM Cobalt Morning Brief: This week, the cobalt industry chain continued to consolidate on a weak note overall. Refined cobalt traded around 380,000 yuan/mt. Although smelters slightly raised their offers, high inventory and weak end-use demand limited price recovery. The trading center of cobalt intermediate products moved lower. Cobalt sulphate ground lower on a weak note. Transactions of cobalt chloride and Co3O4 were sluggish. Cobalt powder remained under pressure due to the traditional off-season. The pullback in raw material prices dragged down ternary cathode precursors and ternary cathode materials. LCO remained stable with a weak bias. Future market trends still require attention on Q3 restocking and end-use demand recovery.

SMM Cobalt Morning Brief: This week, the cobalt industry chain overall consolidated on a subdued note. Refined cobalt spot prices remained stable temporarily. Traders resumed offering, but transactions were still dominated by essential stockpiling, while end-use demand had not yet clearly recovered. Cobalt intermediate products were boosted by news related to DRC. Miners' offers stayed firm, but downstream smelter acceptance was limited, and some traders lowered prices to sell and facilitate deals. Transactions in the cobalt sulphate, cobalt chloride, and Co3O4 markets remained sluggish. Downstream wait-and-see sentiment was strong, and restocking demand had not yet materialized. Cobalt powder prices continued to edge lower, and off-season pressure on hard alloys persisted. Overall, cobalt chain prices may mainly consolidate in the short term, and subsequent recovery will likely need to wait for a rebound in cobalt salt valuations and improvement in downstream demand.

SMM, July 3: At the start of this week, the long-quiet cobalt market saw fresh news again—the DRC announced that unused quotas for H1 2026 will be automatically voided and transferred in a unified manner to the ARECOMS strategic quota pool. Boosted by this news, market pessimism was eased, and refined cobalt prices stopped falling and rebounded, but weak downstream demand remained an inescapable topic in the cobalt market… SMM has compiled this week’s price changes for cobalt products as follows: : According to SMM spot quotes, refined cobalt spot prices stopped falling and rebounded this week. As of July 3, refined cobalt spot quotes stood at 378,000-385,000 yuan/mt, averaging 381,500 yuan/mt, up 2,000 yuan/mt from 379,500 yuan/mt on June 26, an increase of 0.53%. » View SMM cobalt-lithium spot quotes From a fundamental perspective, on the supply side, mainstream smelters’ EXW prices first fell then rose during the week, and currently, EXW prices are stable at 385,000 yuan/mt. After market stabilization, traders resumed offering, with the spot-futures price spread remaining in a range of parity to a premium of 10,000 yuan/mt. On the demand side, boosted by DRC-related news, downstream end-user inquiries warmed slightly, and weekly transactions improved slightly WoW, but most deals were for essential early stockpiling, and a substantive recovery in end-user demand has yet to materialize. In the near term, insufficient downstream demand support, combined with high industry inventories, may keep futures consolidating. A recovery in refined cobalt prices still requires an uptrend in upstream categories such as cobalt intermediate products and cobalt sulphate to drive it. Cobalt salts ( and ): : According to SMM spot quotes, cobalt sulphate spot prices edged down slightly on the first day and then remained stable this week. As of July 3, spot cobalt sulphate quotes were temporarily steady at 85,000-87,000 yuan/mt, averaging 86,000 yuan/mt, down 150 yuan/mt from June 26, a decline of 0.17%. » View SMM cobalt-lithium spot quotes According to SMM, the cobalt sulphate market remained sluggish this week. On the supply side, primary smelters’ quotes remained firm overall, with mainstream enterprises holding their minimum shipment target price at 85,000 yuan/mt. Boosted by the mid-week DRC policy news, market pessimism was repaired, and some recycling smelters and traders’ willingness to sell at lower prices weakened. Low-priced cargo offers were raised from 80,000-81,000 yuan/mt last week to 82,000-83,000 yuan/mt. Demand side showed no significant recovery yet. Downstream enterprises generally adopted a produce-based-on-sales model, and product settlements mostly used a monthly average price mechanism. To avoid the risk of price spread between purchase and sale at specific time points, most enterprises maintained a wait-and-see sentiment in early July, and substantial restocking activities were likely delayed to mid-to-late July. In the short term, cobalt sulphate prices mainly consolidated. The sustained recovery of the market still needs to wait for the concentrated restocking demand from downstream to be realized. : According to SMM spot quotes, the spot quote of cobalt chloride drifted lower this week. As of July 3, cobalt chloride spot quotes fell to 102,500-104,000 yuan/mt, with an average price of 103,250 yuan/mt, down 2,000 yuan/mt from 105,250 yuan/mt on June 26, a decline of 1.9%. According to SMM, the cobalt chloride market remained sluggish this week. Inquiries increased somewhat, but actual transactions were still scarce. On Tuesday, the DRC announced the cancellation of unused quotas for Q2 2026, which only caused a slight fluctuation in the market in the morning and calmed down in the afternoon, indicating that the market's focus had shifted from supply-side disruptions to fundamentals, own demand, and inventory conditions. However, from a fundamental perspective, price rebound faced significant resistance, and the market remained pessimistic in the short term. Supply side, smelter quotes began to stabilize, with some enterprises even slightly raising quotes to test the market; but although downstream inquiries increased, actual implementation was limited. July prices will still need to wait for representative transactions to emerge before having reference significance. Demand side, the "rush to buy amid continuous price rise and hold back amid price downturn" sentiment dominated purchasing decisions. Downstream enterprises were still observing whether the current stabilization was a mid-drop pause or a true bottom, and the wait-and-see atmosphere was strong. Overall assessment, short-term cobalt chloride prices are expected to be largely stable, with limited further downside room. : According to SMM spot quotes, Co3O4 spot quotes continued to decline this week. As of July 3, Co3O4 spot quotes fell to 315,000-330,000 yuan/mt, with an average price of 322,500 yuan/mt, down 12,500 yuan/mt from 335,000 yuan/mt on June 26, a decline of 3.73%. According to SMM, the Co3O4 market remained extremely sluggish this week, with actual transactions being scarce. Supply side, the mid-year report window had passed, enterprises that were bearish earlier had largely completed their shipments, and after the phased selling pressure was released, quotes stabilized this week. Demand side, although the traditional purchasing window had opened, amidst sustained price pressure, downstream cathode material plants still mainly adopted a wait-and-see stance and continued to push for lower prices in purchasing. The persistently depressed prices further dampened upstream willingness to sell. Overall, the subsequent trajectory of Co3O4 will depend on the price direction of cobalt salts, with near-term movement likely to track sideways in tandem with cobalt chloride. On the raw material front for cobalt intermediate products, SMM spot price data showed that spot prices for cobalt intermediate products (CIF China) edged down this week, with overall fluctuations remaining relatively small. As of July 3, spot prices for cobalt intermediate products (CIF China) stood at $24.25–25.5/lb, with an average of $24.875/lb, down $0.25/lb from the $25.125/lb recorded on June 26, a decline of 0.1%. SMM learned that trading in the spot cobalt intermediate product market was sluggish this week. Mid-week, the DRC government announced the revocation of miners' unused export quotas for H1 2026, significantly boosting long-term bullish sentiment in the market. Supported by this, mainstream miners kept their offers firm around the $25.5/lb level, while some traders' lowest shipment prices for small-lot cargoes stabilized near $24/lb. With cobalt salt market valuations currently running at low levels, a back-calculation based on spot cobalt salt prices suggests that downstream smelters would only accept raw material procurement prices around $23/lb. This creates a notable price spread between buyers and sellers, resulting in a stalemate with few actual transactions being concluded. In the short term, downstream smelting demand offers weak support, and intermediate product prices are likely to continue moving sideways. A breakout to the upside would depend on a demand recovery driven by improved cobalt salt valuations. On the news front, at the start of this week, DRC policy once again roiled the market with the announcement, based on the Autorité de Régulation et de Contrôle des Marchés des Substances Minérales Stratégiques (ARECOMS) press release No. 2026/003, that unused quotas from H1 2026 would be revoked and reallocated into a strategic quota pool. Following the policy release, SMM quickly assessed its potential impact, measuring the supply of cobalt intermediate products (including some high-grade recycled cobalt as supplementary material) into China for June-December 2026 and for 2027 based on two scenarios: 1. Based on market statistics, as of May 2026, miners in the DRC had only made prepayments for approximately 32,000 mt in metal content of cobalt intermediate products. Considering a shipping period of over three months from the DRC to China and the need to supply some cobalt resources to regions outside China, SMM assumes China's imports of cobalt intermediate products from June 2026 to December 2026 will be 46,000 mt in cobalt metal content, with domestic self-production of around 500 mt. For 2027, assuming miners allocate 80% of the 87,000 mt in metal content quota for cobalt intermediate products to China, imports would be around 70,000 mt in cobalt metal content, with domestic self-production of around 1,000 mt. 2. With the strong growth in China's recycled cobalt output this year driven by high economic viability, high-quality recycled cobalt that can partially substitute intermediate products is factored in as supplementary material. This would contribute approximately 18,000 mt in cobalt metal content of raw material from June to December 2026, and about 36,000 mt in cobalt metal content in 2027. From June to December 2026, demand for cobalt intermediate products (including some high-grade recycled cobalt as supplementary material) in China is expected to be around 58,000 mt in cobalt metal content, resulting in a slight surplus of 6,000 mt in cobalt metal content. This surplus is primarily attributed to the arrival of large volumes of intermediate products into ports from August 2026 onward. In 2027, China's demand for cobalt intermediate products (including some high-cobalt recycled supplementary materials) is approximately 105,000 mt Co, with a slight surplus of 3,000 mt Co. However, this surplus remains subject to the following uncertainties. First, if miners, after completing approvals, reduce circulation to control intermediate product prices, the market will still face relatively tight conditions. Second, the approval progress in the DRC remains relatively slow, and the future basic export quotas may not be fully shipped out. If imports fall short of expectations, the market will still face a relatively tight supply.

SMM Cobalt Morning Meeting Minutes: This week, the cobalt industry chain overall stopped falling and stabilized. Spot refined cobalt prices rebounded slightly, boosted by policy news from the DRC, and market sentiment recovered somewhat, but actual transactions were still dominated by rigid demand stockpiling. Cobalt intermediate product prices remained stable, with miners’ quotations firm but limited acceptance from downstream smelters, resulting in a significant bid-ask spread. Market transactions for cobalt sulphate, cobalt chloride, and Co3O4 remained sluggish, with strong downstream wait-and-see sentiment and restocking demand not yet significantly released. Cobalt powder prices continued to decline, as off-season pressure on cemented carbide persisted. Ternary cathode precursor prices weakened, while ternary cathode materials rebounded slightly but with limited transactions. LCO demand remained relatively weak.

[SMM Cobalt Lithium Morning Meeting Minutes: This week, overall sentiment in the industry chain recovered, as a rebound in upstream raw material prices drove some material prices higher. Lithium carbonate, LFP, and separator segments performed strongly. Downstream production schedules stayed high, with demand from energy storage, commercial vehicles, and power batteries still providing support. However, acceptance of high prices was limited, and actual transactions were mostly based on essential needs. Cobalt salts, nickel salts, and ternary cathode precursors remained in the doldrums, with a strong wait-and-see sentiment prevailing in the market. Overall, short-term prices may continue to drift higher, but attention still needs to be paid to raw material arrivals, the sustainability of restocking, and the realization of end-use demand going forward.]