Downstream demand to improve in Q3, cobalt prices resumed their upward trend

SHANGHAI, Jul 7 (SMM) — Inventories of domestic cobalt raw materials have declined 7,200 mt with metal content since January 2021. The supply shortage in Q1 stood at 5,100 mt of metal content and at 2,100 mt of metal content in Q2 which has eased on a quarterly basis.

Q1: Domestic cobalt raw material supply shortages lingered amid stockpiling for Chinese New Year holidays, cobalt reserve buyout by the State Reserve Bureau, low inventories at companies and logistics issues in South Africa. Prices of smelting products rose sharply. Port capacity has recovered at the beginning of March, and cobalt raw material inventory shortages were expected to ease, lowering prices. Q2: Inventory shortages eased at smelters due to the off-season, lowering prices of smelting products. The supply gap of raw materials reoccured in May, slowing price declines of smelting products.

Q3E: The peak season for 3C combined with the commissioning of many ternary precursors and cathode material production lines of materials are expected to bolster cobalt products prices.

Note: Domestic cobalt raw materials include supply of cobalt concentrates, cobalt intermediate products and recycled scrap; cobalt briquettes and cobalt plates can also be used as raw material after being dissolved.