China's Cobalt Prices Slump Further on Inactive Demand

SHANGHAI, Sept. 28 -- China's cobalt products prices continued to fall in the past week as purchases from the downstream have yet to improve.

    Cobalt chloride is selling at RMB 68,000-69,000/mt (USD 9,958-10,102/mt), down from RMB 69,000-70,000/mt previously, and transactions remain limited.

    "Business is not good. Sellers are sticking to their existing prices and refuse to sell any lower, while buyers are expecting prices of RMB 65,000-66,000/mt," said a trader in Beijing.

    "Cobalt concentrate prices are around USD 12.5/lbs now, which means the salt producers could be looking at a cost of around RMB 68,000/mt for their cobalt chloride product. It will be hard for producers to lower prices further," said a Bejing-based market analyst.

    However, the downstream also has limited orders now, forcing them to push down raw material prices. Lithium cobalt oxide prices have slid to RMB 235,000-245,000/mt from RMB 240,000-250,000/mt in mid-September.

    "The big Chinese battery manufacturers have almost all locked their raw material demand of the second half in earlier months of this year. It is those medium and small battery producers that may have to buy. But they may only come after mid-October, when prices may have declined further," said an official from a lithium cobalt oxide producer.

    August cobalt import statistics released this week also failed to diminish market concerns about the high cobalt inventory in China.

    China imported 17,358 mt of cobalt ore and concentrate in August, down 25% from July or 5% lower than corresponding month last year, but still above 15,000 mt, which some market participants consider high.

    "As far as I know, imports will stay above 15,000 mt in coming months...the market will be in surplus this year," said a trader in Shanghai.

    The market is still waiting for restocking from the downstream but if Jinchuan Group cuts its benchmark prices again in the next few days, following international price movements, the Chinese cobalt market could face more pressure soon.

    "We are waiting to see whether Jinchuan Group will lower its prices. If it does, market sentiment could be affected and this could cause further price falls," said a second Shanghai-based trader.

    Jinchuan Group's benchmark cobalt cathode price remained at RMB 350,000/mt on Friday, higher than the market transaction price of RMB 310,000-330,000/mt.

    (Source: Metal Bulletin)