China's imports of cobalt raw materials, including ore and intermediate products, came in at 3,700 mt in metal content in May, down 57% from a month ago and down 55% from a year ago, showed the latest customs data. 

Brazil's Vale has resumed operations at its distribution centre in Malaysia, the Teluk Rubiah Maritime Terminal (TRMT), but the fast spreading of the coronavirus in Brazil may keep its iron ore shipments from rebounding significantly in the near term. 

Prices of cobalt and lithium products may continue to face some downward pressure as demand from overseas consumers remains weak and the domestic market is cautious about restocking. 

Several cobalt salt producers in China, including a leading firm, plan to scale back operations in May, SMM learned, as downstream sectors are cutting output with the COVID-19 crisis battering global economies, and also due to high costs and raw material supply disruptions.

China's imports of hydrometallurgical cobalt intermediate products, a raw material for producing cobalt, came in at 36,012 mt in the first two months of the year, showed the latest customs data. 

The coronavirus outbreak deterred domestic logistics and companies’ operations, which led to reduced imports of cobalt raw materials last month. The feedstock deliveries normalised in early March and cobalt salt producers have lifted their operating rates to 60-70% as of March 26. 

China’s cobalt salt producers could face risks of raw materials shortage in June if the coronavirus outbreak continues to worsen in African countries and disrupt Congo’s ore exports in April, SMM estimates. But in the short term, prices of cobalt products in China may extend their downside trend as the demand outlook remains weak amid the COVID-19 impact. 

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.