Cobalt ore import uncertainty increased, lithium prices stabilised on cautious stance

SHANGHAI, Jul 21 (SMM) – Prices of domestic refined cobalt and cobalt salts will continue to find support from costs amid coronavirus-induced increasing uncertainty of cobalt raw materials imports. Improvement in demand and supply fundamentals of cobalt salts will also buoy prices. 

Prices of Industrial-grade lithium carbonate have rebounded slightly, and the market takes a wait-and-watch stance for prices. SMM expects a turning point in near-term prices will be determined by a rise in demand. It still requires some time for destocking in the industry. 

SMM assessed that prices of refined cobalt rose an average 2,000 yuan/mt from a week ago to 232,000-247,000 yuan/mt as of July 17. Prices of cobalt intermediate products were largely unchanged on the week at $9.8-10.3/lb.

Offers of refined cobalt increase while trades in the spot market were thin. Only a handful of traders restocked as they bet on further increase in prices. Demand from the overseas market has not shown signs of recovery amid summer break. Prices of refined cobalt may unlikely to extend their increase in the near term and its price spread with cobalt sulphate will narrow. 

Prices of cobalt intermediate product held steady last week. The coronavirus crisis in Africa increased costs at local suppliers of cobalt raw materials, making them less willing to sign orders with small amounts. 

SMM assessed prices of battery-grade lithium carbonate flat from a week ago, standing at 39,000-41,000 yuan/mt as of July 17, with prices of industrial-grade materials also unchanged on the week at 32,000- 37,000 yuan/mt.

Upstream producers in the lithium carbonate market tended to lift prices above their production costs after prices have declined to the bottom levels. However, the current demand and supply fundamentals still keep market participants cautious about long-term prices of lithium carbonate.