[SMM analysis] limitation or price? Active Game between domestic Cobalt smelting Enterprises and Raw material suppliers

Published: May 08, 2020 18:45 (GMT+8)

SMM, 8 May:

After the May Day holiday, South Africa "lifted the ban", cobalt raw material imports have returned to normal, the early suffering from raw material procurement of Chinese smelting enterprises are about to carry out new raw material procurement. However, at present, the procurement of domestic smelting enterprises is not as positive as the previous speculation, cobalt raw material suppliers are therefore an offer to the outside world, the game between the two sides is still continuing. A few days ago, the CIF price of cobalt intermediates was $9.8 to $10.4 per pound. SMM believes that in the short term, raw material prices are relatively strong and slightly rebounded, but the market turnover is less.

As a result of the control of outbreaks in Congo and South Africa, Africa exported very little cobalt to China in April and is expected to be reflected in customs data for May and June, given the shipping cycle. It is understood that Glencore, Eurasian resources, Shengtun and other large and medium-sized raw material suppliers have stocks in South African ports, but other small and medium-sized suppliers are trapped in inland Africa because of poor land transportation. After the lifting of the ban on South African ports, large and medium-sized suppliers can give priority to finding ships and scheduling. If the domestic demanders urgently need to find suppliers to replenish the raw material inventory, the head supply enterprises have a strong willingness to offer prices, and the shipping schedule of small and medium-sized enterprises may be later, although the price may give some preferential treatment, but for domestic smelting enterprises, "limitation" is a priority at present.

Domestic waste black powder (no reprocessing, can be directly used in production) discount coefficient of about 70%, converted to the purchase price of about 16-170000 yuan / ton. In terms of downstream demand for raw materials, at present, the inventory of large smelting enterprises is relatively sufficient, and small and medium-sized smelters have also slightly reduced the operating rate since late April in order to maintain follow-up production. After the festival, the smelting enterprises are more willing to raise the price of cobalt salt, but the demand orders in the downstream battery market decreased in May, and the price support is limited. Based on this, smelters want to drive down the purchase price of raw materials.

Although this week market rumors have smelting enterprises to purchase low-cost raw materials, but the shipping date has been scheduled to the first ten days of June, and the enterprise procurement volume is relatively large. At present, most of the market is eager to purchase raw materials for small and medium-sized enterprises, bargaining power is relatively weak; large smelters still wait and see the market and price cobalt salt and other products. Suppliers of raw materials have raised prices strongly, and buyers are expected to purchase a small amount of raw materials to maintain production, and the price of cobalt raw materials will pick up slightly.

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