SHANGHAI, May 13 (SMM) - Domestic cobalt sulphate is expected to be in small supply deficit of 237 mt in metal content in May. China's cobalt sulphate output rose 10% month-on-month in April. And in May, the arrival of cobalt-based raw materials at ports may continue to improve. However, affected by the pandemic, precursor manufacturers have reduced their production. Downstream purchases were not active in April, and the inventory of finished products continued to accumulate. Due to inventory pressure, the cobalt salt factories’ production schedule in May will be reduced , and the supply is expected to fall by 2.5%.
On the demand side, spreading COVID in China has restricted the downstream procurement of precursors, resulting in a decline in precursor outt in April. The impact of the pandemic continues in May, and some leading manufacturers have begun to ramp up the production approaching half-year reporting period. It is expected that downstream power and electronics battery output will increase in May. SMM believes that China's total demand for cobalt sulphate in May will increase by 9.7% month-on-month. But considering that the production in May is mainly based on old raw material inventories, the purchasing demand will be low and it is expected that the prices of cobalt salt may continue to decline in May.