Cobalt prices retreated with lithium prices extending decline-Shanghai Metals Market

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Cobalt prices retreated with lithium prices extending decline

Price Review & Forecast 12:04:48PM Nov 04, 2019 Source:SMM

SHANGHAI, Nov 4 (SMM) – The nearby price trend of cobalt products will have more connection with demand in the digital market as the ternary battery sector may unlikely to revive by the year-end. More clarity around the near-term demand and supply will keep cobalt prices stabilised, while the difference in psychological price levels between suppliers and buyers resulted in trade standoff. 

Bearish mood continued to weigh on prices and trades of lithium products last week. In the domestic markets, shipments of seaborne lithium extracted from salt lake will be closely monitored in the fourth quarter, while miners said excessive supply is being depleted. 

The outlook for downstream demand for new energy vehicles in the fourth quarter remains bleak. 

BYD, China’s top electric car maker, on October 29 posted a nearly 90% drop in third-quarter profit against a broader economic slowdown in China. 

For the fourth quarter, the company expected its profit of NEV business to fall from the same period last year after a sharp reduction in government subsidies. It also warned of overall weak auto market demand in the last quarter on macroeconomic headwinds. 

A SMM survey indicated that, as of November 1, operating rates across ternary battery producers in China have slipped to 40-50%, weighed by lacklustre demand and higher prices of raw materials. 

Last week, domestic prices of refined cobalt declined as seaborne materials from Canada added supply and intensified competition in the market.  

Expectations of weaker consumption and greater arrivals in the next two months also pressured offers of cobalt hydroxide and kept spot trades subdued. 

SMM assessed traded prices of refined cobalt at 280,000-295,000 yuan/mt in the week of November 1, down 2,500 yuan/mt on the week, with prices of cobalt hydroxide dipping $0.1/lb to stand at $10.9-11.9/lb.

Prices of cobalt and nickel salts fell significantly last week as downstream producers tended to clear inventories amid pessimistic prospect of demand. 

SMM assessed the average price of cobalt sulphate lost 2,500 yuan/mt from a week ago to 53,000-58,000 yuan/mt, with prices of cobalt chloride slipping 2,000 yuan/mt to come in at 69,000-74,000 yuan/mt. Prices of battery-grade nickel sulphate shrank 250 yuan/mt on the week to 30,000 – 30,500 yuan/mt.

Decline in prices of cobalt chloride erased its premiums against prices of cobalt (II, III) oxide, which is produced with cobalt chloride as feedstock. 

Prices of cobalt (II, III) oxide held flat on the week at 220,000-230,000 yuan/mt, according to SMM assessments, but sluggish demand may grow the downside risk of near-term prices.

Poor demand also took a toll on prices of ternary precursors, with downstream consumers demanding lower quotes amid intensified competition between producers. 

For the week ended November 1, SMM assessed prices of NCM523 at 97,000-102,000 yuan/mt, down 4,000 yuan/mt from a week ago, with prices of NCM622 down 2,000 yuan/mt on the week to 106,000-110,000 yuan/mt. The prices are poised for further declines in the weeks ahead. 

Prices of lithium carbonate extended their slide last week as thin trades prompted producers of battery-grade lithium carbonate to cut offers to destock. Continued brisk demand for lithium iron phosphate (LFP) will likely drive LFP producers to seek cheap industrial-grade lithium carbonate as feedstock. 

A lithium carbonate producer in Qinghai lifted prices of the industrial-grade material last week, on the back of current low inventories and scheduled output cuts in the fourth quarter. However, overall prices in the market may struggle to recover as demand and supply fundamentals barely improve amid selloff at some producers. 

Last week, SMM assessed prices of industrial-grade lithium carbonate at 47,000-50,000 yuan/mt and prices of battery-grade lithium carbonate at 57,000-59,000 yuan/mt, both down 1,500 yuan/mt on the week.

Prices of lithium hydroxide again drifted lower last week, on greater availability and limited demand from high-nickel materials. 

SMM assessed prices of battery-grade lithium hydroxide (coarse particle) at 61,000-64,000 yuan/mt, down 1,000 yuan/mt on the week. 

Prices of lithium cobalt oxide (LCO), which is used to produce 4.35V batteries, shed 3,000 yuan/mt week on week to 239,000-249,000 yuan/mt, depressed by smaller purchases by small and medium-sized battery mills, even as orders from large digital device producers remained stable. 

Negative prospect for ternary batteries demand before the Chinese New Year dampened purchases of ternary materials, with prices of NCM523 falling 1,000 yuan/mt from a week earlier to 147,000-153,000 yuan/mt and prices of NCM622 losing 3,000 yuan/mt, to 163,000-168,000 yuan/mt. 

Prices of LFP material held steady last week, despite strong demand, as carmakers and battery producers barely accepted higher offers amid overall depression in the power battery market.

Suppliers of high-quality LFP products managed to hold prices at highs, but other suppliers reduced offers to destock amid intense competition.

SMM assessments indicated that prices of LFP used in power batteries were unchanged on the week at 42,500-45,500 yuan/mt.

Stable supply and demand kept prices of lithium manganese oxide (LMO) little changed last week. SMM assessed prices of LMO used in high-energy-density lithium-ion batteries at 26,000-32,000 yuan/mt and prices of LMO used in motive batteries at 43,000-45,000 yuan/mt.

SMM sees prices of LMO facing downward pressure in the short term as demand for consumer batteries may weaken at year-end. 

Key Words:  Market commentary  Cobalt  Lithium 

Cobalt prices retreated with lithium prices extending decline

Price Review & Forecast 12:04:48PM Nov 04, 2019 Source:SMM

SHANGHAI, Nov 4 (SMM) – The nearby price trend of cobalt products will have more connection with demand in the digital market as the ternary battery sector may unlikely to revive by the year-end. More clarity around the near-term demand and supply will keep cobalt prices stabilised, while the difference in psychological price levels between suppliers and buyers resulted in trade standoff. 

Bearish mood continued to weigh on prices and trades of lithium products last week. In the domestic markets, shipments of seaborne lithium extracted from salt lake will be closely monitored in the fourth quarter, while miners said excessive supply is being depleted. 

The outlook for downstream demand for new energy vehicles in the fourth quarter remains bleak. 

BYD, China’s top electric car maker, on October 29 posted a nearly 90% drop in third-quarter profit against a broader economic slowdown in China. 

For the fourth quarter, the company expected its profit of NEV business to fall from the same period last year after a sharp reduction in government subsidies. It also warned of overall weak auto market demand in the last quarter on macroeconomic headwinds. 

A SMM survey indicated that, as of November 1, operating rates across ternary battery producers in China have slipped to 40-50%, weighed by lacklustre demand and higher prices of raw materials. 

Last week, domestic prices of refined cobalt declined as seaborne materials from Canada added supply and intensified competition in the market.  

Expectations of weaker consumption and greater arrivals in the next two months also pressured offers of cobalt hydroxide and kept spot trades subdued. 

SMM assessed traded prices of refined cobalt at 280,000-295,000 yuan/mt in the week of November 1, down 2,500 yuan/mt on the week, with prices of cobalt hydroxide dipping $0.1/lb to stand at $10.9-11.9/lb.

Prices of cobalt and nickel salts fell significantly last week as downstream producers tended to clear inventories amid pessimistic prospect of demand. 

SMM assessed the average price of cobalt sulphate lost 2,500 yuan/mt from a week ago to 53,000-58,000 yuan/mt, with prices of cobalt chloride slipping 2,000 yuan/mt to come in at 69,000-74,000 yuan/mt. Prices of battery-grade nickel sulphate shrank 250 yuan/mt on the week to 30,000 – 30,500 yuan/mt.

Decline in prices of cobalt chloride erased its premiums against prices of cobalt (II, III) oxide, which is produced with cobalt chloride as feedstock. 

Prices of cobalt (II, III) oxide held flat on the week at 220,000-230,000 yuan/mt, according to SMM assessments, but sluggish demand may grow the downside risk of near-term prices.

Poor demand also took a toll on prices of ternary precursors, with downstream consumers demanding lower quotes amid intensified competition between producers. 

For the week ended November 1, SMM assessed prices of NCM523 at 97,000-102,000 yuan/mt, down 4,000 yuan/mt from a week ago, with prices of NCM622 down 2,000 yuan/mt on the week to 106,000-110,000 yuan/mt. The prices are poised for further declines in the weeks ahead. 

Prices of lithium carbonate extended their slide last week as thin trades prompted producers of battery-grade lithium carbonate to cut offers to destock. Continued brisk demand for lithium iron phosphate (LFP) will likely drive LFP producers to seek cheap industrial-grade lithium carbonate as feedstock. 

A lithium carbonate producer in Qinghai lifted prices of the industrial-grade material last week, on the back of current low inventories and scheduled output cuts in the fourth quarter. However, overall prices in the market may struggle to recover as demand and supply fundamentals barely improve amid selloff at some producers. 

Last week, SMM assessed prices of industrial-grade lithium carbonate at 47,000-50,000 yuan/mt and prices of battery-grade lithium carbonate at 57,000-59,000 yuan/mt, both down 1,500 yuan/mt on the week.

Prices of lithium hydroxide again drifted lower last week, on greater availability and limited demand from high-nickel materials. 

SMM assessed prices of battery-grade lithium hydroxide (coarse particle) at 61,000-64,000 yuan/mt, down 1,000 yuan/mt on the week. 

Prices of lithium cobalt oxide (LCO), which is used to produce 4.35V batteries, shed 3,000 yuan/mt week on week to 239,000-249,000 yuan/mt, depressed by smaller purchases by small and medium-sized battery mills, even as orders from large digital device producers remained stable. 

Negative prospect for ternary batteries demand before the Chinese New Year dampened purchases of ternary materials, with prices of NCM523 falling 1,000 yuan/mt from a week earlier to 147,000-153,000 yuan/mt and prices of NCM622 losing 3,000 yuan/mt, to 163,000-168,000 yuan/mt. 

Prices of LFP material held steady last week, despite strong demand, as carmakers and battery producers barely accepted higher offers amid overall depression in the power battery market.

Suppliers of high-quality LFP products managed to hold prices at highs, but other suppliers reduced offers to destock amid intense competition.

SMM assessments indicated that prices of LFP used in power batteries were unchanged on the week at 42,500-45,500 yuan/mt.

Stable supply and demand kept prices of lithium manganese oxide (LMO) little changed last week. SMM assessed prices of LMO used in high-energy-density lithium-ion batteries at 26,000-32,000 yuan/mt and prices of LMO used in motive batteries at 43,000-45,000 yuan/mt.

SMM sees prices of LMO facing downward pressure in the short term as demand for consumer batteries may weaken at year-end. 

Key Words:  Market commentary  Cobalt  Lithium