Market rumours of cobalt stockpiling continue to support cobalt prices

SHANGHAI, Sep 16 (SMM) — Market rumours that China plans to stockpile 2,000 mt of cobalt continue to support the market, though the reserve volume has not been confirmed. Electrolytic cobalt from overseas continuously flows into China, and domestic electrolytic cobalt stocks are increasing. Therefore, cobalt prices may rise slightly to 275,000-285,000 yuan/mt in the next few weeks.

Despite the marginal increase of power ternary demand, inventories of battery plants were relatively high in Q4. Combined with the downstream 3C terminal gradually entering the low season of procurement, the downward trend of cobalt prices was obvious. In terms of lithium, lithium salt plants are under pressure on prices of lithium carbonate with high shipment. Some of them have raised the prices of the October orders to be signed in late September, and it is expected that the prices of lithium carbonate will increase in the next two weeks.

Chinese new energy vehicle output stood at 106,000 units in August, up 17.7% from a year ago, and sales came in at 109,000 units, up 25.8% on year, according to China Association of Automobile Manufactures (CAAM) data. Both output and sales have set a new monthly record this year. The passenger car market is still growing steadily, which gradually drives the new energy car market to rise gradually in the second half of the year. The subsidy policy for new energy cars entering the rural market recently and Hongguang MINI EV drive the domestic demand for micro electric vehicles. In addition, C-end consumers continued to grow steadily, and the operating market gradually recovered.

According to the data of China Automotive Power Battery Industry Innovation Alliance, China's power battery output totalled 7.4GWh in August, up 11.7% on year and 22.4% on month. Among them, the output of ternary batteries stood at 4.4GWh, accounting for 58.7% of the total output, down 4.3% on year and up 33.4% on month. The output of lithium iron phosphate battery came in at 3.0GWh, accounting for 40.4% of the total output, increasing by 45.4% on year and up 8.5% on month. In August, ternary batteries maintained steady growth, still occupying a large advantage in the passenger car market.

It is said that four brands of electrolytic cobalt were reserved this time, but the exact amount and prices have not been confirmed yet. The demand for overseas electrolytic cobalt was weak. Recently, a large amount of overseas electrolytic cobalt has flowed into the domestic market with high stocks of domestic electrolytic cobalt. The impact of cobalt stockpiling on prices of electrolytic cobalt may be limited. Cobalt intermediate prices remained unchanged this week. The stockpiling of cobalt intermediate products in China is increasing, but the quotations of most suppliers are stable, and there are few downstream inquiries, leading to the weak market turnover. The price of SMM electrolytic cobalt stood at 268,000-280,000 yuan/mt this week, and the average price decreased by 1,500 yuan/mt compared with last week. The price of SMM cobalt intermediate products came in at $11.5-12.1/lb, and the average price remained unchanged from last week.

Prices of battery-grade lithium carbonate remained stable and stood at 39,500-40,500yuan/mt last week, and the average price was flat compared with last week. The average mainstream transaction price was still within the range, and some transaction prices were higher than 41,000 yuan/mt, but they have not yet reached the mainstream transaction volume. SMM understood that some large lithium salt manufacturers were in short supply, and there was no spot transaction, but the external quotation has partially increased. According to the feedback from some enterprises on the downstream demand side, it is expected to purchase October raw materials in the middle and late September, and the transaction situation will be decided after further price comparison.

For industrial-grade lithium carbonate, prices rose 500 yuan/mt to 33,500-37,000 yuan/ton, and the average price increased by 250 yuan/mt compared with last week. The demand for lithium iron phosphate and lithium manganate has increased, with increasing frequency of inquiry for industrial carbon by enterprises and small upside room for the prices of industrial carbon.