![]() The Platts fixed price assessment for cobalt hydroxide has shown a sustained downtrend since late April. However, Chinese market participants have increasingly questioned how reflective this pricing mechanism is, particularly as China's COVID-19 lockdowns have highlighted an increasing disconnect between the metal and downstream cobalt product prices. The cobalt hydroxide market traditionally prices off a percentage payable indicator, with the underlying price being cobalt metal. At current levels, hydroxide prices would have to be below $13/lb for refiners to not make a loss, sources said. "It's too early to say for sure how big the impact will be, I think we just have to wait and see," the refiner said.Ĭhinese traders were generally bearish on the mid-term hydroxide prices as supply-demand fundamentals do not support a price hike. But the market is likely to see a downward pressure on metal prices in the weeks to come if the stockpiling doesn't happen. If the NFSRA stockpiles, it could change the metal market fundamentals significantly, a Chinese refiner said. "People in the market are always saying China will be back next month, it is a crystal ball situation and hard to make a good prediction." "We are now three-four months in, where China is not there, so we need to see how that evolves," a cobalt salts producer said. There was more uncertainty downstream in the Chinese market on the effect of a stockpiling on the hydroxide and sulfate markets.Ĭobalt hydroxide demand has been poor from the battery sector and prices are at a 20-month low with market sources not seeing convincing signs of a recovery in the Chinese market, which accounts for 74% of global refining capacity. If cobalt metal prices were to rise, they could lift cobalt hydroxide prices even though end-market demand remains potentially unchanged, according to sources.Ĭhinese mid-term hydroxide outlook bearish The Chinese economy is protecting itself against sanctions or trade disruptions attached to political or military movements." "It is simple, it is a national stockpile. "It is obviously a good thing, I don't know how anyone could be unsure," a US metal trader said. Some metal traders are bullish about a possible NFSRA stockpiling. 9, though the prices have ease through the week as market sentiment cooled. "If you traced NFSRA buying on metals, the market has always responded upwards."Ĭhinese sources cited gains of up to Yuan 50,000/mt in domestic cobalt metal prices Aug. they did this with nickel, copper, and a lot of other products," a US trader said. ![]() Unconfirmed rumors suggested further stockpiling of 3000 mt metal early 2021. The Chinese state reserves authority is estimated to have bought just over 2,000 mt cobalt metal in fourth quarter, 2020. Some sources have theorized that the NFSRA purchases commodities mainly to support market prices. The NFSRA is responsible for purchasing and storing reserves of strategic materials and executing certain procedures in accordance with the National Development and Reform Commission, China's top economic planner. 10, down 38% from a 2022-high toward end-April, S&P Global Commodity Insights data showed. ![]() ![]() ![]() Platts assessed 99.8% cobalt metal at $24.5/lb IW Rotterdam Aug. It still comes down to demand from the battery sector." "But this metal purchasing will not offer much help on hydroxide or sulfate prices. "It is difficult to get official confirmation and we are still not certain ," said a Chinese trader. Weak demand from the 3C - computers, communications, and consumer electronics - sector and the battery industry's efforts to reduce cobalt usage in nickel-manganese-cobalt batteries are likely to continue to weigh on cobalt metal prices, sources said. NFSRA stockpiling has typically lifted the market sentiment, but sources are uncertain whether it can help boost the sluggish Chinese sulfate and hydroxide markets, which are struggling to regain footing even after the lifting of Shanghai's COVID-19 lockdown. Receive daily email alerts, subscriber notes & personalize your experience. ![]()
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