SHANGHAI, Jun 6 (SMM) – A major cobalt smelter in Zhejiang province transferred 400 mt, in Co content, of cobalt sulphate capacity into nickel salt production since the start of May, as poorer demand from power batteries dragged on prices of cobalt sulphate, an SMM survey showed on Thursday June 6. 

A pessimistic outlook on cobalt sulphate prices also prompted the smelter to destock actively. This is likely to expand the downside room in prices in the short term. 

As of Wednesday June 5, offers of cobalt sulphate stood at 41,000-43,000 yuan/mt, with an average price of 42,000 yuan/mt. On a metal content basis, this stood at a discount of 40,000 yuan/mt against refined cobalt, and a discount of 10,000 yuan/mt over cobalt chloride. 

Higher prices of cobalt hydroxide, a raw material for producing cobalt sulphate, eroded profits at smelters and also depressed their production enthusiasm. SMM assessed prices of cobalt hydroxide at $9.7-10.2/lb as of Wednesday June 5. 

Output of ternary materials decreased last month as battery plants lowered their demand for NCM523 and NCM622. This accounted for the weaker consumption of cobalt sulphate, as the feedstock for ternary materials. 

The market expects demand for ternary materials unlikely to improve in the next two months. 

According to SMM data, the first four months saw a surplus of cobalt sulphate by 600 mt in metal content. Output of the material is estimated to fall 11% on the month in May, with producers clearing their inventories.