Disrupted feedstock supply, demand recovery buoyed cobalt salts prices

SHANGHAI, Feb 17 (SMM) – Cobalt: Prices of cobalt salts edged higher last week, on the back of an increase in post-holiday demand from major consumers, continued price rally in overseas cobalt prices, and disrupted shipment of raw materials. 

Trades will likely improve in Jiangxi province this week as local producers recovered operations and logistics restrictions eased. Major downstream producers will continue to purchase feedstock to fulfil orders received pre-holiday, and this will support cobalt salts prices in the second half of February. 
Higher prices of cobalt salts drove producers of cobalt (II, III) oxide and ternary precursor to lift offers, but the increase was capped by demand from downstream cathode material producers. 

Lithium: Prices of lithium carbonate also rose last week on the impact of logistics issues. Downstream buyers accepted a slight increase in offers, but remained cautious about its price movement as the market will continue to destock. High-quality lithium hydroxide rallied on supply tightness, and demand from high-nickel battery materials will determine near-term prices of lithium hydroxide.

Battery material: Prices of ternary precursor moved higher with cobalt salts prices as raw materials storage and demand from major consumers lifted prices of cobalt salts. Prices of lithium iron phosphate (LFP) and lithium manganese oxide (LMO), meanwhile, held stable as producers have not fully recovered amid sluggish demand from battery mills. 

China’s NEV and power battery markets will likely remain subdued in February, as a coronavirus (COVID-19) outbreak delays the resumption of demand by more than a week and affects upstream production. 

According to SMM database, about 48,000 new energy vehicles obtained qualification certificates in China in January, down 52.3% from a year earlier. New energy passenger vehicles accounted for the greatest share of 88%, with production standing at 43,000 units. 

The capacity of power batteries installed on NEVs also slumped 53.5% on the year to stand at 2.3GWh in January. 

Suspension amid the 2020 extended Chinese New Year holiday and a high base on frontloading production in January 2019 ahead of NEV subsidy cuts accounted for the decline in NEV production and installed battery capacity in January.