China imports of cobalt raw materials more than halved in May on South Africa virus lockdown, imports to recover in June-August

SHANGHAI, Jun 29 (SMM) – China's imports of cobalt raw materials, including ore and intermediate products, came in at 3,700 mt in metal content in May, down 57% from a month ago and down 55% from a year ago, showed the latest customs data. 

Major supplier South Africa imposed lockdown measures in April to prevent the spread of the coronavirus, and this led to the sharp declines in China’s cobalt raw materials imports last month. 

Imports in the first five months were 14% higher than the same period last year, standing at about 32,400 mt in metal content, SMM calculates. 

Cobalt raw materials imports in China (Source: SMM, China customs)

The customs data for May verified SMM previous forecasts that a lockdown-driven plunge in the arrivals of cobalt raw materials in May would trigger supply tightness of ores and intermediate products used to produce refined cobalt at Chinese smelters in early June and prompt them to lift offers. 

Raw materials imports in May were mostly contributed by Glencore’s deliveries to top Chinese smelters under long-term contracts, pointing to reduced availability in the spot cobalt market. SMM assessed prices of cobalt salts edged higher between end-May and early-June, with the average cobalt sulphate price climbing some 3.3% from May 11 to 47,000 yuan/mt as of June 10. 

The impact of feedstock issues on smelters operations have faded as deliveries recover with the easing of lockdown rules and some forward cargoes have already arrived at domestic plants. It is understood that Glencore in June-August will ship those raw material products that are previously unfulfilled, under long-term contracts. 

SMM estimates that some 3,800 mt in metal content of cobalt raw materials will arrive at Chinese ports in June, with the arrivals rising to 7,400 mt in metal content in July. 

According to customs data, China’s cobalt ore imports in May stood at only 0.8 mt in Co content, based on a Co grade of 8%, down 99% on the month and down 100% on the year. This dragged cobalt ore imports during the January-May period 20% lower year on year, at 2,100 mt in metal content. 

In May, China’s imports of unwrought cobalt intermediate that was produced through hydrometallurgical processes decreased by 61% on the month and by 57% on the year to stand at 3,300 mt in Co content, based on a grade of 27%. 

Import prices of hydrometallurgical cobalt intermediate products averaged $27,430/mt in Co content in May, 6% lower from a month ago while 45% higher from a year earlier.