Consumption of LCO batteries to flat in June amid seasonal lull

SHANGHAI, May 25 (SMM) – Orders for lithium cobalt oxide (LCO) batteries are unlikely to pick up month on month in June as the May-June period is a slack season for consumer batteries. This will not add to demand for battery raw materials such as cobalt chloride and cobalt (II, III) oxide in the coming month. 

SMM survey indicated that domestic demand for LCO batteries and materials from the tablet computer sector improved in May but consumption from the smartphone sector weakened. 

Overseas orders for LCO from the Japan and South Korea’s markets are roughly flat month on month for June, while purchases from India may come weaker than expected. China’s smartphone maker Xiaomi said its Indian plant will normalise operations in June, but its elevated stockpiles of raw materials may delay its purchases of LCO batteries and materials to July. 

LCO prices may see some upward potential this week as prospects for cobalt raw materials supply tightness in early June, caused by the coronavirus-related lockdowns in South Africa, drove up prices of cobalt salts last week. Major LCO battery plants are signing purchase contracts for LCO at end-May, and this may also support LCO prices. 

The price rally of cobalt salts and cobalt (II, III) oxide may unlikely find sustained support from demand in July, if the cobalt raw material supply chain recovers in late-June with the easing of the coronavirus curbs. 

SMM assessed prices of domestic LCO (Co≥60%), which is used to produce 4.35V batteries, climbed 500 yuan/mt from a week ago to 192,000-197,000 yuan/mt as of May 25. 

Prices of cobalt chloride (Co≥24.2%) and cobalt (II, III) oxide (Co≥72.8%) are assessed at 55,000-58,000 yuan/mt and 174,000-179,000 yuan/mt, respectively, up 1,750 yuan/mt and 3,000 yuan/mt from a week ago.