China’s Supply Surplus of Cobalt Sulphate May Turn to Deficit on Reduced Output

SHANGHAI, Dec 17 (SMM) – China’s supply surplus of cobalt sulphate shrank to around 62 mt in metal content in November. However, the surplus may turn to a deficit of around 607 mt in metal content in December.

The supply and demand fundamentals supported the prices upward in November and December. The overseas prices of refined cobalt kept rising, which pushed up the costs of cobalt salt, and the quotations also increased.

China’s cobalt sulphate output stood at 5,732 mt in metal content in November, down 1% month on month but up 33% year on year. As the prices of raw material and auxiliary materials were higher than the cobalt salt prices, the producers reduced the production. Some nickel sulphate producers will reduce or suspend the production due to the COVID-19 pandemic, so the nickel sulphate supply is expected to keep falling in December. China’s cobalt sulphate output is expected to stand at 5,247 mt in metal content in December, a month-on-month decrease of 8% and year-on-year increase of 13%.

On the demand side, Chinese demand for cobalt sulphate totalled 5,320 mt in metal content in November, including 4,410 mt in metal content from ternary cathode material precursor, a month-on-month increase of 1.3%. The transactions in the precursor market were thin as the demand did not increase as expected.

Some precursor plants have put new capacities into production in December, which drove up the demand of cobalt sulphate. The demand of cobalt sulphate by tricobalt tetraoxide stood stable, as the demand rebounded, the plants restocked at the end of the year, and the discount of cobalt chloride over cobalt sulphate disappeared. SMM estimates the total domestic demand for cobalt sulphate to total 5,325 mt in metal content in December, including 4,595 mt in metal content from ternary cathode material precursor. The output of cobalt sulphate declined slightly in November, and is likely to drop further in December, while the demand will increase.