SHANGHAI, Jun 3 (SMM) – Prices of cobalt salts held stable last week as concerns about raw materials supply tightness waned. Inquiries increased in the lithium market but actual trades were light. SMM learned that demand for cathode materials shows no signs of picking up in June. Limited demand for raw materials may see cobalt prices retreating after seaborne cobalt raw materials arrive at ports. 

Amid little improvement in domestic demand and supply, imports of salt lake brine, a feedstock for extracting lithium, will likely determine the movement of near-term lithium prices. 

In China’s power battery market, the capacity of installed power batteries increased from a month ago in May and orders for June also improved on the month. This followed demand from the new energy vehicle (NEV) market fell significantly in the first four months of the year, as the accumulative sales of NEVs in China decreased 41.37% year on year to 155,600 units in January-April. 

The coronavirus outbreak in Q1 took a toll on the online car-hailing market as a number of drivers terminated their contracts with the ride-hailing companies. Subsidy stimulus from central and local governments supported the NEV market since April and this also accelerated the recovery of the electric bicycle market. In the overseas markets, the rise in capacity remained at a slow pace while some European and American carmakers restarted operations. Tesla, for instance, is only operating at a rate of 50-60%. New COVID-19 cases reported in car manufacturers in Detroit will also slow their resumption. 

SMM assessed prices of refined cobalt stabilised at 248,000-258,000 yuan/mt in the week to June 3, following a week-on-week rise of 3,000 yuan/mt in prices as of May 29. Prices of cobalt hydroxide held unchanged for over a week, at $9.8-10.4/lb.

While refined cobalt prices extended increase, large-scale downstream plants showed little restocking willingness given their ample stockpiles. Medium-scale and small consumers purchased as required. This kept refined cobalt prices stabilised in the second half of last week after sellers hiked offers earlier last week. 

Purchasing prices of cobalt raw materials stayed at high levels with some medium-sized and small smelters restocking in small amounts. But smelters demand was subdued for forward arrivals of cobalt raw materials from Africa, and downstream orders for June remained sluggish. Consumption will not be strong enough to sustain the price rally of cobalt raw materials in the near term.