Imports of Cobalt Intermediate Products Fell Sharply in October, Tight Cobalt Raw Material Inventories to Continue until Q1 2022

SHANGHAI, Nov 26 (SMM) - According to customs data, China imported 5,399 mt of cobalt raw material in metal content in October, a month-on-month decrease of 31% and year-on-year decrease of 49%. The imports totalled 73,700 mt in metal content from January to October, up 3% YoY Imports of cobalt ore were 69 mt in metal content in October (calculated at 8% grade), down 56% MoM and 58% YoY.

Imports of cobalt ore were 1,079 mt in metal content from January to October, down 70% year-on-year. Imports of cobalt hydrometallurgy intermediate products were 5,166 mt in metal content in October (calculated at 27% grade), down 30% month-on-month and 44% year-on-year. Imports of cobalt hydrometallurgy intermediate products totalled 66,700 mt in metal content from January to October, up 5% year-on-year. Imports of unwrought cobalt were 165 mt in metal content in October (calculated at 99.8% grade), down 32% month-on-month and 86% year-on-year. Imports of unwrought cobalt totalled 5,958 mt in metal content from January to October, up 18% year-on-year. From January to October, the average monthly import volume of cobalt raw materials was 7,371 mt in metal content, of which the average monthly imports of cobalt intermediate products was 6,667 mt in metal content. Based on the current operating rates of domestic smelters and taking into account of the supply of recycled cobalt, domestic cobalt raw ore and imported cobalt briquettes, it requires 7,800-8,500 mt in metal content of imported cobalt intermediate products so as to basically meet smelters’ demand for cobalt raw materials. The cobalt raw material supply deficit in China remains large this year. Imports of cobalt intermediate products by Gansu, Jiangsu, Hunan, Guangdong, Hubei, and Fujian declined MoM while imports by Shanghai, Jiangxi and Zhejiang increased MoM in October.

The average import price of cobalt hydrometallurgy intermediate products stood at $56,280/mt in metal content in October, up 5% MoM and 94% YoY. The average import price of cobalt hydrometallurgy intermediate products stood at $48,331/mt in metal content from January to October, a year-on-year increase of 86%. Imports of cobalt intermediate products fell sharply in October, mainly due to increasing shipping schedule uncertainty, and higher ocean freight quotations, which further increased the transportation resistance of cobalt ore and cobalt intermediate products. Except for long-orders of imports, the small orders of imported refined cobalt fell sharply due to premiums of overseas refined cobalt over domestic refined cobalt.  According to cobalt raw material suppliers and smelters, the uncertainty of shipping schedule will continue at least until Q1 2022, so the domestic cobalt raw material inventory continues to be tight. Overseas refined cobalt prices rose further amid positive fundamentals, which makes the pricing benchmark of cobalt intermediate products rise; the spot quotation coefficient is likely to remain high amid low spot inventory and thin quotations of small orders of cobalt intermediate products. Downstream producers of battery materials mainly reduce inventory until December. Therefore, the transactions of domestic battery materials thinned. Downstream battery plants and end-users will restock for the Chinese New Year from January next year. Cobalt salt prices are likely to increase amid low cobalt raw material inventory and high prices.