Refined cobalt quotes slightly recover, while Co3O4 prices continue to decline; market awaits follow-up to DRC's June ban [Weekly Observation]

SMM News on May 16: This week, cobalt product prices showed mixed performance. The spot quotes for refined cobalt have slightly recovered. Currently, the DRC has not yet announced relevant policies on cobalt export bans, and it is expected to announce follow-up measures in June. Further attention should be paid to relevant developments in the future. In terms of cobalt salts, the quoting attitudes of cobalt sulphate and cobalt chloride smelters have polarized... SMM has compiled the price changes of cobalt products this week, as detailed below:

Refined Cobalt:

This week, the spot price of refined cobalt first rose and then fell, with the overall price showing a slight recovery compared to last week. As of May 16, the spot quotes for refined cobalt remained at 235,500-248,600 yuan/mt, with an average price of 242,050 yuan/mt, up 50 yuan/mt or 0.02% from May 9.

》Check SMM cobalt and lithium spot quotes

According to SMM, from the supply side, refined cobalt smelters continue to cut production, and the market is still digesting social inventory. From the demand side, orders from downstream producers have not seen significant recovery, and producers continue to maintain a purchasing rhythm of scheduling production according to demand, with no significant inventory-building actions observed downstream. According to the latest news, the DRC has not yet announced relevant policies on cobalt export bans, and it is expected to announce follow-up measures in June. It is expected that next week, the short-term supply and demand situation will remain unchanged, and refined cobalt prices may fluctuate.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

According to SMM spot quotes, cobalt sulphate spot quotes fell by 150 yuan/mt this week, to 48,400-50,000 yuan/mt, with an average price of 49,200 yuan/mt, down 0.3% from May 9.

》Check SMM cobalt and lithium spot quotes

According to SMM, from the supply side, spot quotes for cobalt sulphate from smelters have slightly loosened, and quotes from recycling plants have also declined. From the demand side, downstream precursor producers have weak acceptance of current cobalt sulphate prices and have not yet initiated purchasing actions. Co3O4 enterprises, on the other hand, are dominated by a wait-and-see sentiment, resulting in extremely sluggish spot transactions for cobalt sulphate recently. It is expected that next week, cobalt sulphate spot prices may maintain a fluctuating trend.

Cobalt Chloride:

According to SMM spot quotes, cobalt chloride spot quotes also failed to escape the downward trend this week. As of May 16, cobalt chloride spot quotes fell to 59,700-61,000 yuan/mt, with an average price of 60,350 yuan/mt, down 50 yuan/mt or 0.08% from May 9.

According to SMM, from the supply perspective, due to the unresolved issue of overseas cobalt raw material transportation cycles, smelters remain cautious in their quoting and have hardly engaged in dumping at low prices. From the demand perspective, the purchasing rhythm of downstream Co3O4 enterprises has slowed down, with fewer market inquiries, and spot transactions are mainly for small-batch rigid demand. It is expected that the peak sales season for NEVs in Q3 may drive a rebound in restocking demand from downstream enterprises, and the cobalt chloride market may continue to fluctuate at highs. Industry insiders remain cautious about cost transmission and policy expectations.

Co3O4:

According to SMM spot quotes, Co3O4 spot prices have been "falling continuously" this week. As of May 16, Co3O4 spot prices dropped to 204,000-212,500 yuan/mt, with an average price of 208,250 yuan/mt, down 1,000 yuan/mt or 0.48% from May 9.

According to SMM, despite the high raw material costs due to the export ban in the DRC, excessive domestic inventory has also suppressed the upward momentum of prices, leaving Co3O4 spot prices weak. Downstream demand has not shown significant improvement, and most LCO enterprises are still purchasing as needed. The market inquiry atmosphere is sluggish, with fewer effective transactions, and the overall market is in a wait-and-see phase.The industry is generally waiting for further news to stimulate the market. It is expected that Co3O4 spot prices will continue to fall in the short term.

On the news front, according to a report by Reuters cited by MiningWeekly, a study released by the Cobalt Institute on Wednesday forecasts that cobalt demand growth will outpace supply, with the cobalt surplus expected to ease in 2024 and turn into a deficit by the early 2030s.The report was completed by Benchmark Minerals Intelligence. In the short term, the future of the cobalt market will depend on the developments in the DRC, the world's largest cobalt producer. At the end of February, the country decided to implement a four-month temporary export ban, after which cobalt prices have risen by 60% to $16/lb.

In addition to the uncertainties brought about by the DRC's export ban, global cobalt supply is expected to grow at an average annual rate of 5% in the coming years. The DRC's share of the global market will decline from 76% last year to 65% by 2030, as Indonesia's cobalt production will rise rapidly, increasing its share from 12% to 22%.

Wang Cong, General Manager of Industry Research at SMM, also provided an in-depth analysis of the dynamics of China's cobalt industry chain, global resource competition landscape, and demand trends at the Global Cobalt Forum hosted by the Cobalt Institute in Singapore recently. When mentioning the performance of China's cobalt market after the ban, she noted that the DRC's export ban triggered a rapid increase in cobalt prices, but the domestic industry chain, buffered by sufficient inventory, did not experience a large-scale supply deficit. As prices rebounded, domestic cobalt salt enterprises quickly released capacity, with production increasing on a MoM basis. In addition, the proportion of cobalt sulphate from recycling in China's cobalt sulphate production surged from 10% to 16% within two months, reflecting the rapid response capability of price-sensitive capacity. If the policy on importing lithium battery black mass is further relaxed, the proportion of recycled resources used will increase further. 》Click to view details