[SMM analysis] the increase in ternary demand is very small. The price of cobalt sulfate may continue to decline after the arrival of cobalt raw materials in Hong Kong.

SMM6 March 14: China began to destabilize cobalt sulfate in May this year, and SMM expects to continue destocking to about 900 metal tons in June. The supply and demand side of cobalt sulfate begins to ease, but it still takes time to get rid of inventory, and the downstream demand increment is relatively small.

Balance of Cobalt Sulfate in China from June 2019 to June 2020

Source: SMM

On the supply side of cobalt sulfate, China produced 2700 tons of cobalt sulfate in May, down 14 per cent from the previous month. SMM expects China to produce 2700 tons of cobalt sulfate in June, down 2 per cent from the previous month. For specific information about the reduction of cobalt sulfate supply, please read: [SMM Analysis] Cobalt Sulfate production in May was reduced month-on-month from May to June.

Major downstream power markets:

Affected by the downturn of the power market, car companies and battery factories reduce costs, the operating rate of ternary materials and precursors is relatively low, and high nickel products are gradually replaced by 5 and 6 series partial proportion products. The proportion of the output of ternary materials in April and May 2020 showed that the proportion of high nickel products decreased obviously, and the 6-series products gradually increased.

The proportion of the output of ternary materials by product type in April 2020

Source: SMM

The proportion of the output of ternary materials by product type in May 2020

Source: SMM

The output of ternary precursors downstream of cobalt sulfate increased slightly from May to June, mainly due to an increase in export orders for small power. SMM expects the demand for cobalt sulfate from ternary precursors to increase by 7.2% month-on-month in June, about 160 metal tons. The increase in demand accounted for only about 6% of the overall demand for cobalt sulfate in June.

The demand for power in the lower reaches increased in May, but the demand increment was relatively small, and the shortage of cobalt raw materials was the main reason for the price increase of cobalt sulfate manufacturers in May. The shortage of cobalt raw materials has basically alleviated in the early stage, the price of cobalt sulfate has been adjusted back this week, and it still takes time for cobalt sulfate supply to exceed demand. Cobalt raw materials will arrive in Hong Kong one after another next week, and the demand increment is insufficient. Cobalt sulfate quotation may continue to be lowered.

SMM Cobalt Sulfate Price from April to June 12, 2020

Source: SMM

We are pleased to provide the whole market with the newly launched SMM China Cobalt Lithium New Energy Weekly (click to view) to help you keep track of the weekly hot spots of China's cobalt lithium new energy industry chain and gain an in-depth understanding of market supply and demand changes and price trends.

SMM's newly launched Cobalt Lithium New Energy Industry Weekly mainly tracks the market trends and price changes of the whole industry chain in China, such as cobalt, lithium, precursors, battery materials, lithium batteries and new energy vehicles, while reviewing weekly hot events and topics, with lithium battery as the core series of the entire industry chain, by showing the most clear industry data, conduct panoramic in-depth analysis.

In SMM China Cobalt Lithium New Energy Weekly, you can learn about the price, output, capacity, operating rate and inventory changes of each product in the cobalt and lithium industry chain. We will also track the demand changes and national policies of the global lithium battery terminal market (including new energy vehicles, 3C consumer electronic products, etc.) to give a comprehensive overview of the cobalt lithium new energy industry chain.

If you want to know more about China's cobalt lithium new energy industry chain data, you are welcome to subscribe to our SMM China Cobalt Lithium New Energy monthly report and China Cobalt Lithium New Energy Database.

Welcome to contact SMM Cobalt Lithium New Energy Research team:

Qin Jingjing 021 Murray 51666828

Lin Fangwen 021Mui 51666878

Mei Wang Qin 021 Mui 51666759

Huo Yuan 021 Murray 51666898