SHANGHAI, Jul 30 (SMM) – Amid sluggish downstream demand, China's spot cobalt and lithium markets stayed in a downward trend last week with cobalt smelters unwilling to resume production after environmental restriction.
Meanwhile, a lithium company told SMM that it planned to re-evaluate the economic benefits and feasibility of its new project due to falling prices.
SMM forecasts that cobalt price to rebound in the next two to three months on current low inventory. However, fundamentals and consumption are still key things to watch for the price movement in the long term.
SMM assessed spot refined cobalt price at 495,000-530,000 yuan/mt as of Friday July 27, down 11,500 yuan/mt from a week ago. This was dragged by accelerated drops in international spot prices, which have dipped to approach that in domestic market. While producers lowered offers amid bearish sentiment, downstream buyers adopted a watch-and-wait approach and mostly purchased as needed.
Last Friday, spot prices of cobalt sulphate stood at 102,000-106,000 yuan/mt, and spot prices of cobalt chloride were at 125,000-127,000 yuan/mt, both down 2,000 yuan/mt from a week ago, according to SMM assessment.
Inventory of cobalt salt at smelters and downstream plants shrank as suspension at most smelters remained. Although enquiries from downstream increased on the week, actual procurements were limited as buyers purchased only small amounts.
SMM assessed nickel sulphate at 26,500-28,500 yuan/mt last Friday, down 500 yuan/mt on the week due to weakened refined nickel prices. Supply increased at Guangxi Yinyi last week as it resumed production.
In the cobalt (II, III) oxide market, slow season weighed on overall prices although some large-sized plant tried to hold offers at 380,000 yuan/mt. Some producers utilised scrap-made cobalt salt as raw materials. Their offers were therefore more competitive than those using primary raw materials. SMM assessed cobalt (II, III) oxide at 375,000-385,000 yuan/mt last Friday, 5,000 yuan/mt lower from a week earlier.
SMM assessed cobalt oxide at 360,000-370,000 yuan/mt as of last Friday, flat from a week ago, and cobalt powder at 610,000-620,000 yuan/mt, 10,000 yuan/mt lower on the week. Dipping price of refined nickel depressed trading activities of cobalt oxide, and weak downstream demand from hard alloy industry pushed down cobalt powder prices.
Prices of ternary precursor NCM 523 was assessed at 120,000-122,000 yuan/mt as of last Friday, down 2,000 yuan/mt from a week ago, and prices of ternary precursor NCM622 at 128,000-130,000 yuan/mt, 1,000 yuan/mt lower on the week. Lacklustre demand from the digital market and falling prices of refined cobalt and nickel accounted for the decline.
Similarly, SMM prices of ternary materials also slid with that of NCM 523 at 197,000-207,000 yuan/mt, 3,000 yuan/mt lower on the week. Price of ternary material NCM 622 stood at 217,000-227,000 yuan/mt, flat from a week ago.
SMM assessed lithium carbonate price 4,000 yuan/mt lower on the week to stand at 101,000-106,000 yuan/mt as of last Friday. As the market has been in a downward trend for four months, a large-sized domestic producer planned to cut output of lithium carbonate and to start trial production of lithium hydroxide next month. Price of battery-grade lithium hydroxide went flat at 135,000-145,000 yuan/mt last Friday, with that of micro powder lithium hydroxide hitting a high of 150,000 yuan/mt, SMM assessed. Firm demand from downstream customer and booming high-nickel ternary materials industry provided support.
SMM prices of 4.35V lithium cobalt oxide (LCO) went flat on the week to stand at 410,000-420,000 yuan/mt last Friday. However, weakened prices of cobalt and lithium are expected to depress LCO price in the short run.
SMM assessed lithium iron phosphate (LFP), used in motive lithium-ion battery, at 68,000-73,000 yuan/mt, down 2,000 yuan/mt on the week. The decline was slower as orders resumed a bit from the energy storage market and large-sized plants.
Plunged lithium prices and slack season dragged down the price of lithium manganese oxide (LMO) last week. SMM assessed LMO, used in high-energy-density lithium-ion battery, at 44,000-54,000 yuan/mt, and LMO used in motive battery at 60,000-66,000 yuan/mt, both 3,000 yuan/mt lower on the week.