SHANGHAI, May 7 (SMM) – Prices of Chinese cobalt products may slow their downside trend in the short term as uncertainties around raw materials imports remain even as top supplier South Africa has eased coronavirus lockdown measures to level 4 and allowed freight delivery via railway and ocean to resume.
Shipment efficiency from South African ports could be deterred as there were large amounts of cargo arrivals stranded at ports due to restrictions on automotive transport. A customer told SMM that its shipment schedule has been delayed to later than May 20 from the original May 12.
Some Chinese smelters that consume cobalt raw materials may adjust their operating rates in late-May as they concern about disrupted feedstock supply in early-June if the delivery from South Africa continues to be postponed to the second half of May. This may keep near-term prices of cobalt salts underpinned by the supply front.
However, gradual resumption of cobalt raw materials shipment from May 10 will minimise the possibility of a supply shortage at Chinese smelters in June. This suggests some downward potential in cobalt salt prices as smelters will have to cash in for the purchases of feedstock.
SMM assessed prices of refined cobalt (Co≥99.8%) at 225,000-240,000 yuan/mt as of May 7, flat since April 28. Prices of domestic cobalt sulphate (Co≥20.5%) have stayed steady since early April, standing at 44,000-47,000 yuan/mt as of May 7.
It is understood that the South African government on Wednesday May 6 changed the regulations governing the movement of cars under level 4 lockdown.
In the rules announced Monday, cars were allowed on the roads until 9 pm to complete a trip but on Wednesday, the Department of Transport changed the cut off time to 7 pm.
South Africa has been under level 4 of the COVID-19 lockdown since May 1.
