Cobalt Sulphate Supply Is Expected to Return to Surplus in January

SHANGHAI, Jan 18 (SMM) - On the supply side, domestic cobalt sulphate was in supply deficit in December, which stood at 13 mt in metal content in the month. The supply is expected to return to surplus in January with an amount of 163 mt in metal content.

In December-January, the support from the fundamentals will weaken as a whole. However, the prices of cobalt salt will still rise amid rising overseas refined cobalt prices, coupled with the robust pre-CNY holiday restocking as well as the delayed sea logistics, which will result in less supplies.

China’s cobalt sulphate output stood at about 5,634 mt in metal content in December, a month-on-month decrease of 2% but a year-on-year increase of 12%. Two cobalt sulphate manufacturers have been closed for half a month due to spreading COVID-19 pandemic, while some were modifying their production lines, leading to a MoM decline in total output. It is expected that the cobalt sulphate output will rise slightly on the month after the manufacturers resume their production in January. China’s output of nickel sulphate is likely to stand at 5,938 mt in metal content in January, up 5% month-on-month and 20% year-on-year, according to SMM estimate.

On the demand side, the market’s combined demand for cobalt sulphate stood at 5,297 mt in metal content, among them 4,437 mt in metal content was contributed by the ternary cathode material precursor sector, which rose 0.6% MoM. The precursor supply was slightly higher than the demand as the downstream materials sector was restricted by the supply tightness of lithium salt, and the precursor’s demand for cobalt salt stabilised as a result.  The precursors sector will see both new capacities being put into production as well as production suspensions for maintenance. Meanwhile, considering the current trend of reducing the use of cobalt, SMM has re-calculated the unit consumption of cobalt sulphate in 5-series NMC and NCA precursors. The precursors’ demand for cobalt sulphate will drop as a whole. In terms of Co3O4, some manufacturers conducted maintenance in December, and the total output is expected to recover in January after they return to normal production. The market’s combined demand for cobalt sulphate stood at 5,425 mt in metal content, among them 4,405 mt in metal content was contributed by the ternary cathode material precursor sector, according to SMM estimate.