SMM Analysis on When Will Cobalt Salt Prices End Its Downturn

SHANGHAI, Jun 21 (SMM) – Refined cobalt prices in the Chinese spot market kept falling recently, losing 10,000 yuan/mt to 400,000-420,000 yuan/mt today, with the average price down 28.5% from March 15 to 410,000 yuan/mt.

Spot cobalt sulphate prices also went down, falling 1,000 yuan/mt in a single day to 79,000-82,000 yuan/mt.

Refined cobalt prices have entered a downward channel since last week due to sluggish demand. The low-end prices of refined cobalt were relatively stable, while the high-end prices fell due to price cuts by large refined cobalt plants. 

According to customs data, China imported 7,100 mt of cobalt raw materials in metal content in May, a month-on-month decrease of 4% and year-on-year drop of 1%. SMM predicts that the import volume of cobalt intermediate products will continue to decrease in June as the severe flood in South Africa in April disrupted shipments from the Port of Durban.

The production of cobalt sulphate fell sharply in May due to decline in port arrivals of imported raw materials and sluggish market conditions. Although some precursor producers gradually recovered from the pandemic, cobalt sulphate demand improved only slightly in May as battery makers focused on destocking. The demand for cobalt sulphate from China’s NMC precursor industry stood at 4,097 mt in metal content in May, up 3.6% MoM.

SMM estimates that cobalt salt output will pick up in Q3, but the risks of supply chain disturbances may still exist. With the improvement of the domestic pandemic situation and introduction of new energy vehicle subsidy policy, the demand outlook will be positive. NMC precursor output will climb steadily in Q3, boosting cobalt sulphate demand. It is expected that the domestic cobalt sulphate market will be in a tight balance in H2, which will allow its prices to rebound slightly.