Chinese cobalt tetroxide prices slide in weak consumer market, sulfate prices rangebound

China’s cobalt tetroxide prices drifted lower in the week to Wednesday September 1, due to weak demand from battery producers, while cobalt sulfate prices remained rangebound, with producers rejecting lower bids.

Fastmarkets’ price assessment for cobalt tetroxide 72.6% Co min, delivered China fell to 275,000-285,000 yuan ($42,562-44,110) per tonne on September 1, down from 282,000-292,000 yuan per tonne on August 27.
Demand for lithium cobalt oxide (LCO) cathode materials from Chinese battery manufacturers remains weak because of the reduced consumption of consumer electronics and the continuing shortage of semiconductor chips, sources told Fastmarkets, and that is putting pressure on prices.
Spot market activity for cobalt tetroxide in China has remained thin so far in early September, with most consumers either on the sidelines and in no hurry to purchase or giving aggressive bids to push prices down.
“Persistent weak demand for cobalt tetroxide at the end of August has continued into early September and some buyers have been bidding as low as 270,000 yuan per tonne for tetroxide, which is quite hard to accept considering our production costs,” a producer source told Fastmarkets.
A second producer source said market sentiment remained bearish for cobalt tetroxide and prices were still facing downward pressure.
“The downstream LCO sector might find it hard to see any significant recovery in the coming months,” the second producer source said.
Cobalt sulfate prices, meanwhile, were rangebound at the current level with most producers unwilling to sell any lower and withholding sales by rejecting lower bids.
Fastmarkets’ weekly price assessment for cobalt sulfate 20.5% Co basis, exw China was unchanged at 76,000-79,000 yuan per tonne on Wednesday.
Some sources wanted cheaper cobalt sulfate in the first half of the week, but failed to reach any deals because most producers insisted on higher prices to cover their production costs.
“Currently, [bids] for cobalt sulfate are too low and we are unwilling to sell [and keep] suffering losses. Considering the [price of our main] raw material, cobalt hydroxide, remains at high level, cobalt sulfate prices should be at least above 80,000 yuan per tonne,” a sulfate producer said.
“The overall market for cobalt sulfate remained quiet in the first half of this week. [There are] some cheaper prices, such as 74,000 yuan per tonne, [but these] are for materials using scrap-fed raw materials, not regular feedstock (cobalt hydroxide),” a second sulfate producer added.
Some on the buyer side said any rise in cobalt sulfate prices would be hard because demand might not increase significantly in the short term and will slow down at the end of September because of the National Day holiday in early October.
And the slower-than-expected recovery in hydroxide shipments from South Africa to China has kept cobalt hydroxide prices at a high level, adding pressure to margin-sensitive Chinese smelters.
Fastmarkets’ cobalt hydroxide payable indicator, min 30% Co, cif China stood at 88-90% of the standard-grade cobalt benchmark metal price (low end) on September 1, unchanged since August 6.

Carrie Shi

Carrie.shi@fastmarkets.com

Published

Carrie Shi

September 02, 2021

11:39 GMT

Beijing