Chinese cobalt market review and forecast post-CNY

Electrolytic Cobalt: During the Chinese New Year (CNY) holiday, market prices in the electrolytic cobalt market remained temporarily stable, with transactions pending until after the holiday resumption. The current supply of cobalt raw materials continues to be in a tight pattern, and prices for imported cobalt intermediates remain at high levels, providing support for electrolytic cobalt from the cost side. With the resumption of production after the holiday, downstream demand is expected to gradually recover, and the pace of inventory digestion is likely to accelerate. Although high inventory levels will still suppress the elasticity of price increases in the short term, under the combined effect of strong cost support and gradual demand recovery, electrolytic cobalt prices are highly likely to show a moderate upward trend. The overall center of gravity of operations is expected to move up gradually, presenting a pattern of volatile but firm strength.

Co3O4: During the CNY holiday, the trading atmosphere in the Co3O4 market remained persistently subdued. A small amount of low-priced raw materials circulated in the market before the holiday, but the shipments were hindered, and manufacturers' willingness to purchase raw materials was correspondingly weak. On the demand side, manufacturers reported that concentrated replenishment after the holiday represents potential positive demand. On the supply side, production volumes continued to decline in the first two months of 2026. This was due, on one hand, to a shortage of upstream raw materials restricting production operations, and on the other hand, to manufacturers successively suspending production for maintenance during the holiday. Combined with weak demand, this dampened enterprises' enthusiasm for production.

Cobalt Sulfate: During the CNY holiday, the market entered its seasonal off-season. Cobalt sulfate prices remained stable at around Yuan 97,500/tonne, with limited upward space in the short term. The situation of tight raw material supply is expected to persist until the second quarter. After the holiday, as the off-season effect gradually fades, the market will still be dominated by the core factor of tight raw material supply, leaving little room for price declines. However, the pace of downstream demand recovery will become the key factor restricting price increases. The overall market is expected to remain volatile but stable.

Lithium Cobalt Oxide: During the CNY holiday, Co3O4 prices remained temporarily stable but operated within a high range overall. Before the holiday, lithium carbonate price trends fluctuated significantly. These two factors combined to keep the comprehensive cost of LCO raw materials operating at a high level. During the holiday, mainstream quoted prices in the market remained basically stable around Yuan 410,000/tonne. Looking at the demand side, downstream battery cell manufacturers' replenishment plans are concentrated around the resumption of work and production after the holiday. It is expected that centralized procurement for LCO will gradually commence after the Chinese New Year holiday.

Edited by Cassie Li, lixiangying@mysteel.com