SHANGHAI, Feb 22 (SMM) – During the CNY, domestic market transactions were stagnant, and overseas refined cobalt prices rose by 3%. In the second half of 2020, the import window opened, and overseas refined cobalt flowed into China, and leading to a decrease in overseas cobalt stocks. Domestic cobalt prices continued to rise since December 2020, and the raw material situation continued to be sluggish. In addition to the aerospace industry, other industries such as magnetics materials, catalysts, and electronics are showing signs of recovery. As a result, restocking demand from overseas traders and end-user industries increased and prices rose.
According to incomplete statistics, domestic cobalt raw material inventory is expected to continue to decrease in the first quarter. Considering cobalt briquettes and other substitutes to supplement the gap, domestic raw material gap still exists. Some large-scale cobalt salt factories reported that the shortage of cobalt raw materials from March to April will affect scheduled production. Combined with the rise in the prices of refined cobalt and the rise in the coefficient of cobalt intermediates and recycled waste, prices of raw materials continued to rise.
Domestic cobalt sulphate stocks began to fall in May 2020 and cobalt sulphate continued to be in short supply. Recently, the expected quotation in the market has risen to over 90,000 yuan/mt, and the converted metal prices far exceed prices of refined cobalt.
According to an SMM survey, the downstream ternary precursor orders for cobalt sulphate basically maintained. Major manufacturers reported that overseas orders increased and domestic orders were partially reduced due to limited capacity. From the perspective of overall scheduled production, it is expected that the ternary precursor production will remain flat from January from March to April, higher than February. Orders for cobalt tetroxide in the other downstream of cobalt sulphate increased slightly, and the expected prices rose slightly. The actual transaction still needs to be tracked. From the perspective of overall scheduled production, it may be difficult for operating rate of cobalt tetroxide companies to increase the in March-April due to tight raw material inventories, but the short supply will still lift up the prices of cobalt sulphate. SMM expects the mainstream transaction prices of cobalt sulphate to rise to 90,000-95,000 yuan/mt.
