Home / Metal News / Cobalt & Lithium / Cobalt prices extend rally, price spread among lithium salts narrow
Cobalt prices extend rally, price spread among lithium salts narrow
Sep 23, 2019 14:19CST
Cobalt sulphate remained in discount against cobalt chloride as demand from the new energy sector failed to resume

SHANGHAI, Sep 23 (SMM) – Prices of cobalt-related products continued their rally amid bullish sentiment last week, and cobalt sulphate remained in discount against cobalt chloride.

For cobalt raw materials, anticipations of higher overseas offers drove domestic suppliers to offer lower discounts, and actual trades were moderate.

Price spread among lithium salts further narrowed. SMM expects the change in inventories and additions of demand to determine long-term prices of lithium salts.

China's Ministry of Industry and Information Technology (MIIT) released the latest 324th batch of motor vehicle new models last week. The catalogue includes 299 new energy models under 111 carmakers, of which 256 are pure electric vehicles, 23 are plug-in hybrid vehicles, and 20 are fuel cell models. 

Special vehicles accounted for 133 units, or 45% of the total NEV new models this time, with electric buses taking up 42% and passenger vehicles 13%.

In terms of the types of power batteries, 211 models, or 71% of the total, are equipped with lithium iron phosphate (LFP) batteries, while some 17% are with ternary batteries. SMM learned that carmakers such as China’s Chery Automobile have switched ternary batteries on some models to LFP ones due to cost pressure after NEV subsidy cuts since late-June. Some other automakers including Volkswagen mulled adopting LFP batteries in Chinese market. 

SMM believes that domestic scale-back on national subsidies will continue to prompt carmakers to turn to more cost-effective batteries. 

Last week, domestic prices of refined cobalt further trended upsides amid rising offers overseas. Major domestic producers held from providing offers on shortage of inventories. Downstream consumers procured in small volumes as required. 

Producers of cobalt hydroxide hiked offers by providing smaller discounts for further delivery. Spot offers at ports also firmed up despite few trades last week. 

SMM assessed traded prices of refined cobalt climbed 7,000 yuan/mt from a week ago, to stand at 280,000-290,000 yuan/mt in the week of September 20. Prices of cobalt hydroxide rose $0.3/lb on the week to $10.5-11.5/lb.

Producers of cobalt, nickel salts continued to raise offers as consumers returned from the Mid-Autumn Festival holiday to restock. 

Prices of cobalt sulphate remained in discount against cobalt chloride as demand from the new energy sector failed to resume. Cobalt sulphate producers faced insufficient momentum to shift capacity to cobalt chloride as they may struggle to find spot consumers. 

SMM assessed prices of cobalt sulphate at 55,000-59,000 yuan/mt in the week of September 20, up 2,000 yuan/mt on the week, with prices of cobalt chloride standing at 67,000-72,000 yuan/mt, up 2,000 yuan/mt. Prices of battery-grade nickel sulphate stood flat on the week at 30,000-30,500 yuan/mt.

Brisk demand for digital devices drove lithium cobalt oxide (LCO) producers to replenish raw material cobalt (II, III) oxide, whose traded prices extended increases by an average 12,000 yuan/mt on the week to 210,000-220,000 yuan/mt as of September 20. 

Prices of ternary precursor also moved higher with prices of raw materials, despite limited improvement in power battery demand. 

Prices of NCM523 climbed 5,000 yuan/mt on the week to 99,000-104,000 yuan/mt, with NCM622 increasing 5,000 yuan/mt to 106,000-110,000 yuan/mt.

Prices of lithium carbonate held roughly stable last week, underpinned by the recent consumption rally in the digital and LFP markets that improved shipments from lithium carbonate producers. Prices could still face potential supply pressure as high inventories of feedstock at lithium carbonate smelters grow uncertainties around output cuts. 

Severe weather in the major production area of Qinghai will likely affect local production of industrial-grade lithium carbonate in the fourth quarter. 

SMM assessed prices of battery-grade lithium carbonate flat last week at 60,000-63,500 yuan/mt, while prices of industrial-grade lithium carbonate at 50,500-53,500 yuan/mt, down 500 yuan/mt on the week. 

Amid quiet trades, prices of battery-grade lithium hydroxide (coarse particle) extended declines as they shrank an average 1,700 yuan/mt on the week to 66,500-69,000 yuan/mt, SMM assessed. Market participants told SMM that lithium hydroxide supply under long-term contracts remained stable, but spot trades were weak. 

Prices of LCO, which is used to produce 4.35V batteries, rose an average 13,000 yuan/mt last week to 220,000-230,000 yuan/mt, supported by steady consumption from the 5G sector that was unaffected by higher cobalt prices. 

Last week, elevated prices of raw materials drove up quotes of ternary materials at major producers. SMM assessed that trades of NCM523 occurred at 146,000-154,000 yuan/mt, up 8,000 yuan/mt on the week. Deals of NCM622 were closed at 164,000-171,000 yuan/mt, up 9,000 yuan/mt week on week. 

Prices of LFP material, used to produce power batteries, stood flat at 46,000-49,000 yuan/mt last week as prices of lithium carbonate, raw material to produce LFP, showed signs of slower declines and as downstream automakers favour LFP batteries in terms of cost advantage and safety performance.

Intensified competition weighed on prices of lithium manganese oxide (LMO) last week. Prices of LMO used in high-energy-density lithium-ion batteries fell 500 yuan/mt on the week to 28,500-33,500 yuan/mt while prices of LMO used in motive batteries held flat at 44,000-46,000 yuan/mt. 


Market commentary

For queries, please contact Michael Jiang at michaeljiang@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news