SHANGHAI, Feb 3 (SMM) – Some battery producers in Tianjin and Guangdong will recover operations this week from the Chinese New Year holiday, but most other battery mills said they would not reopen before February 10, as required by local governments amid the coronavirus outbreak, a SMM survey showed. This is expected to delay the recovery of demand for battery raw materials including cobalt and lithium by 7-10 days.
Cobalt prices in overseas markets rose 1.5% during the CNY holiday, which supported bullish sentiment in the domestic market. But the upside room in cobalt prices could be capped as virus fears dampen the demand outlook in the first quarter.
A SMM survey suggested that the disease outbreak has delayed the post-holiday resumption of most cobalt producers in China. Small and medium-scale producers are expected to see greater impact in the first quarter while major enterprises may feel smaller impact given their sufficient inventories and continued production during the holidays.
In the lithium market, postponed resumption of downstream producers will depress spot transactions this week. Major smelters in remote Chinese area Qinghai were immune from the virus impact during the holidays, a SMM survey showed.
All lithium ores smelters in China had planned to suspend for maintenance during the CNY holiday, and some may extend the suspension for as long as two months. Processors that extract lithium from ores are likely to postpone their resumption by a week after the official holidays, in line with the estimated recovery of downstream demand.
Most material producers also delayed their resumption of operations, with some mills in Hunan and Tianjin returning in recent days. Spot transactions will be subdued this week as only a few producers of high-nickel ternary materials and precursor continued to operate during the CNY holiday.
