Imports of cobalt raw materials shrink in Apr

Cobalt raw material inventory (excluding refined cobalt) fell 5,100 mt in metal content in Q1.

China’s imports of copper ore and concentrate continued to decline in June, falling to 1.59 million mt from 1.69 million mt in May, according to China customs data released on Tuesday. Imports in the first half of the year, however, remained 3% higher year on year. 

China’s imports of nickel ore and concentrate rebounded on the month in May, rising 24.83% from a month ago to 1.68 million mt, as deliveries resumed from the top supplier the Philippines as the country eased lockdown measures imposed to stop the spread of the COVID-19 pandemic.

Chinese miner Chengtun Mining Group said last week that its subsidiary Xuchen International has finally wrapped up the acquisition of copper and cobalt explorer Nzuri Copper. Xuchen acquired Nzuri’s 100% shares for A$114 million (about 50 million yuan) in cash, according to the statement by the Shanghai-listed Chengtun. Nzuri entered into a binding takeover agreement with Chengtun Mining in February 2019.

The price spread of domestic and overseas cobalt continued to expand, which coupled with rising inventories of cobalt salts in China, added to bearish and cautious sentiment in the market. In the lithium sector, demand recovery in the downstream power battery market remained slow and barely supported prices of battery-grade lithium carbonate. The revival of the digital devices market underpinned prices of industrial-grade lithium carbonate. SMM expects the near-term price development of battery raw materials to be determined by expectations of demand recovery. If the global coronavirus outbreak fails to be effectively addressed in the second quarter, subdued downstream demand may continue to depress prices of upstream raw materials. 

Full resumption of industrial production is expected across China on March 15, including producers in Hubei, the epicentre of the coronavirus, the latest SMM survey showed. Companies in Hubei are currently in preparation for the recovery. The operating rates of Chinese cobalt salts plants are expected to rise to normal levels in March, from only 30-40% in February. As of March 11, the rates stood at 50-60% for most cobalt salts mills.

China's imports of cobalt raw materials, including ore and intermediate products, came in at 8,000 mt in January, down 25% from December, showed the latest customs data. Imports in 2019 were 24%...

Concerns over the prospects of cobalt demand grew after Reuters reported that Tesla is in “advanced stages of talks” to use CATL’s cobalt-free, LFP batteries in cars made in its Shanghai plant

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. 

The upward trend in overseas prices of refined cobalt will support bullish prospects for domestic prices