SunSirs: Cobalt Spot Market: Sustained Weakness Over the Past Month; Divergence Between Domestic and International Markets; Ongoing Supply-Demand Tug-of-War

On August 11, 2026, the SunSirs benchmark price for cobalt stood at 328,700 RMB/ton, down from 347,300 RMB/ton on July 1—a cumulative monthly decline of 5.36%. Over the past thirty trading days, the market's price center has steadily shifted downward, reflecting a persistent weakening trend in the spot market. Current prices sit in the lower-to-mid range for the year; while there is floor support limiting short-term downside, a lack of clear drivers for a rebound keeps the market in a state of fluctuation with a bearish bias. Spot quotes across domestic trading markets have declined in unison, and the average transaction price for cobalt powder has dropped further compared to the previous trading day. Trading activity remains sluggish, and instances of sell-offs within the circulation sector persist.

Emergence of Significant Divergence Between Domestic and International Markets

Throughout the year, the cobalt market has exhibited a trend where domestic and international prices have completely diverged: overseas prices have remained consistently firm, while domestic spot prices have steadily retreated since the second quarter, causing the price gap to widen. Key support for overseas markets stems from constraints on upstream primary cobalt resources; major producing nations have tightened export quotas, logistics (both maritime and overland) remain restricted, and inventories of circulating raw materials abroad are at multi-year lows. Miners are strongly inclined to hold firm on prices, keeping international quotes elevated. In contrast, the domestic market saw a massive influx of overseas intermediate products starting in the latter half of the second quarter, creating a period of loose raw material supply. Coupled with the need for capital turnover in the circulation sector, inventory destocking has driven spot quotes lower. The cost of processing imported raw materials now exceeds domestic market prices (an inverted cost structure), resulting in continued losses for import-based production and a clear disconnect between the supply-demand and pricing dynamics of the domestic and international markets.

Supply-Side Factors: A Balance of Bullish and Bearish Forces

Global primary cobalt faces long-term, rigid supply constraints. Export quotas from key producing regions continue to tighten, and the ramp-up of new overseas projects producing cobalt as a by-product has lagged behind expectations, resulting in a persistent structural deficit in primary cobalt supplies over the medium to long term. However, the domestic supply side is seeing offsetting increases: the circulation of various cobalt-bearing recycled wastes is expanding, processing capacity for retired batteries and scrap alloys is ramping up, and low-cost recycled cobalt continues to enter the market, thereby counteracting the bullish support typically driven by shortages of primary cobalt. Meanwhile, imported overseas hydrometallurgical intermediates are gradually entering the smelting process, ensuring ample domestic supplies of refined products; this further suppresses upward momentum in spot prices, reflecting an ongoing tug-of-war between bullish and bearish forces on the supply side.

Downstream demand remains generally weak, lacking support from bulk procurement.

Demand across key cobalt consumption sectors is sluggish. The consumer electronics supply chain continues to destock, terminal shipment paces have slowed, and procurement volumes for lithium cobalt oxide raw materials remain low. In the power battery sector, while total installed capacity continues to grow, the industry is persistently shifting toward low-cobalt, high-nickel material pathways, causing cobalt consumption per unit to decline year by year; simultaneously, lithium iron phosphate (LFP) materials continue to capture market share, further squeezing the overall demand for cobalt raw materials. Downstream production has largely shifted to a "build-to-order" model, relying on existing orders for limited, essential procurement rather than stockpiling in advance. Leading manufacturers are prioritizing the consumption of their own inventories, causing market-based procurement demand to contract continuously; expectations for pre-peak-season restocking have yet to materialize, making it difficult for the demand side to provide strong price support.

Looking ahead, the short-term pattern of weak supply and demand is unlikely to reverse quickly. The continued influx of recycled cobalt and insufficient essential demand during the downstream off-season continue to suppress prices, with the tight balance of primary cobalt resources providing only a floor for support, limiting the scope for a deep decline. In the medium to long term, there are expectations for marginal improvements in terminal stockpiling during the third quarter; however, the long-term trend toward low-cobalt technologies weakens demand elasticity. Coupled with uncertainties regarding the flow of domestic and overseas raw materials, the market is expected to remain in a state of low-level fluctuation and ongoing contention between bulls and bears. A sustained upward trend awaits a substantial recovery in terminal demand and the full clearing of inventories across the supply chain.

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