SHANGHAI, Jul 7 (SMM) – Prices of cobalt products are expected to continue to moderate in the near term with the arrival of seaborne cobalt raw materials and the continued weak demand for cobalt sulphate.
In the lithium market, stable shipment from major producers in Qinghai saw prices of industrial-grade lithium carbonate flat last week, but prices still faced headwinds to recover given overall excess supply over demand and the destocking willingness at some producers amid high inventories. A halt to the decline in raw materials prices will rest on the recovery of end-users demand.
On the downstream front, the operating rates of power battery plants in July have increased an average 15 percentage points from a month ago. A top battery producer raised its scheduled output this month by 30-40% from June as overseas demand for high-nickel batteries improves and domestic demand for lithium iron phosphate (LFP) batteries rises.
Demand in the small-scale power battery market of two-wheelers and power tools remained brisk, with some battery plants close to full operation. The digital battery market has entered a slack season and battery mills are expected to scale back capacity. The capacity will resume between end-August and early-September.
Mainstream prices of refined cobalt extended their slide in the week ended July 3, decreasing 7,500 yuan/mt from a week ago to 230,000-245,000 yuan/mt, while prices of cobalt hydroxide held stable on the week at $9.8-10.3/lb, SMM assessed.
Continued weakness in overseas prices of refined cobalt prompted domestic suppliers of refined cobalt to destock at lower prices. Traded prices had slipped to 230,000 yuan/mt, with some deals made at as low as 220,000 yuan/mt. Demand from downstream sectors of high-temperature alloy and magnetic materials was subdued as consumers were mostly bearish about near-term prices.
Prices of spot cobalt intermediate products held stable last week amid light trades. SMM expects the spot prices to weaken in the weeks ahead as demand falls while greater imports of cobalt raw materials will arrive.
SMM assessed prices of battery-grade lithium carbonate 500 yuan/mt lower from a week ago, standing at 39,000-41,000 yuan/mt as of July 3, with prices of industrial-grade materials largely unchanged on the week at 31,500-37,000 yuan/mt.
Major producers of lithium carbonate in Qinghai tended to firm up offers, and this kept industrial-grade lithium carbonate prices from falling. But heavy inventory pressure facing most other producers will cap any upsides of lithium carbonate prices amid an absence of a significant pickup in demand. Consumers will continue to demand lower prices.
Demand for battery-grade lithium carbonate will be limited as producers of regular ternary materials have not markedly raised their scheduled production. This will sustain the supply glut of lithium carbonate and keep its prices under downward pressure, even as demand from refining enterprises increases.
