SHANGHAI, Nov 10 (SMM)—China's cobalt sulpuate supply rose 5.1% from September, but declined 2.9% from a year ago, to 3,700 mt (Co content) in October, the latest SMM survey showed. Some large-scale producers increased production of cobalt sulphate used in ternary precursors in October, while small and medium-scale producers still kept low output or focused on producing cobalt chloride. In November, new production lines at a large-scale maker in Jiangxi are expected to yield output, and several plants will recover from equipment maintenance. Total cobalt sulphate supply is likely to rise slightly to 3,800 mt (Co content), up 5.1% month on month and 4.5% year on year, SMM estimates.
Demand for cobalt sulphate from ternary precursors improved significantly in October, jumping 12.2% from September and 64% from a year earlier to 3,800 mt (Co content), surpassing its supply. In addition, demand from tricobalt tetraoxide makers also increased in the month.
In the first half of 2020, China’s cobalt sulphate supply plunged 24% from the same period last year as producers switched to cobalt chloride production or lowered operating rates amid tepid demand from the NEV sector plagued by the COVID-19 pandemic. However, supply started to increase during July-August as downstream demand began to recover, but prices remained lower than that of cobalt chloride as end-users depressed ternary precursor prices. In September-November, downstream demand has exceeded supply.
China’s cobalt sulphate demand-supply structure has continued to improve, providing stronger traction to prices. Cobalt sulphate inventories started to fall since May, and shrank by nearly 1,400 mt (Co content) by October, and are expected to decline further in November. High production costs prompted smelters to increase prices.
