Cobalt commodity prices weakened, and short term sluggish demand disturbances remain



Although the heat of the new energy market is increasing day by day, the prices of upstream raw materials have cooled down significantly. Affected by factors such as the epidemic in the second quarter, the production and sales of new energy vehicles, 3C electronics and other terminal products were restricted, and the prices of various commodities including lithium hexafluorophosphate, cobalt sulfate, nickel sulfate and manganese sulfate declined. Under the disturbance of sluggish demand, the price of cobalt-based commodities continued to be weak in July. There is another article on our website that introduces lithium ion battery cathode materials in detail for your reference.

Cobalt prices continue to decline

Cobalt prices will show a downward trend in 2022 due to sluggish demand. The international cobalt price has dropped from $40/lb in mid-May to about $32/lb recently, and the price of electric cobalt in China has also dropped to around 400,000 RMB/ton. Lithium hexafluorophosphate, which had skyrocketed in the previous period, also suffered a cliff-like decline in the first half of 2022. The average market price once fell from 575,000 RMB/ton at the beginning of the year to 245,000 RMB/ton, a drop of 57.39%.

However, in July, the lithium hexafluorophosphate market showed a rebound. According to data, by July 25, 2022, the mainstream transaction price range of lithium hexafluorophosphate in the Chinese market was 250,000-270,000 RMB/ton, and the average market price rose to 260,000 RMB/ton, up 6.12% from the previous month. Commodity prices for cobalt and cobalt salts failed to regain momentum. According to the data, the average price of cobalt sulfate in July was only 66,000 RMB / ton, which was nearly half of the 119,000 RMB in March, and a month-on-month decrease of 45%.

Cobalt prices continue to decline


According to relevant data monitoring, the price of cobalt fluctuated and fell in July. As of July 31, the cobalt price was 332,700 RMB/ton, down 11.59% from the 376,300 RMB/ton cobalt price on July 1 at the beginning of the month. The data shows that the price of cobalt in China continued to decline. The price of cobalt sulfate fell by 5,000 RMB/ton to 56,500 RMB/ton on the same day, and the prices of cobalt salts such as cobalt carbonate and cobalt chloride maintained a downward trend.

Weak demand for cobalt drags down the market

The recent electrolytic cobalt market is running weakly. Traders' quotations followed the market's weakening, pessimism spread under the pressure of demand and cost, and the pressure on shipments gradually increased. There were price correction operations in the market one after another, quotations continued to bottom out, and some low-priced supply news came out. In the off-season of the market, the negative pressure was superimposed, and the volume of real orders was insufficient.

For the recent cobalt market trend of cobalt products, industry professionals said that the international cobalt price remains weak, the industry lacks confidence in the future market, the downstream is intended to bargain replenishment, and the existing low price negotiations and transaction rumors let the market price had to run down. Under the background of this price, the downstream is not in a hurry to fill the order, the spot market trading volume significantly turned weak, some smelters to take a stable and dark reduction operation, to cope with the depressed market.

Under the dominant mentality of buying up but not buying down, the downstream into the market to buy the enthusiasm is difficult to mention, the new single transaction is basically stagnant, the short-term stop falling difficult. Professionals believe that from the production and sales data of new energy vehicles can be seen that the sales of new energy vehicles rose sharply, but the recovery speed is far less than expected. In addition, due to the impact of the epidemic, the construction of automobile manufacturers is seriously limited, and it is difficult for manufacturers to ensure the sustainability of the future construction.

The stock data of companies is reduced, which aggravates the concern of insufficient demand in the cobalt market. The latest data shows that China's total imports of cobalt raw materials in June 2022 totaled 7,000 tons of metal, down 1% from the previous month and 9% from the same period last year. From January to June 2022, China's total import of cobalt raw materials is 45,800 tons of metal tons. The supply of cobalt market is reduced, and cobalt prices are supported by a certain rise. The global price continued to decline, affecting the sentiment of China's cobalt market.

Weak demand for cobalt drags down the market


Manufacturers had a heavy wait-and-see mood, and China's cobalt price fell. Relevant data show that smartphone sales in China hit a new low in the second quarter of 2022, less than half of the historical peak in the fourth quarter of 2016. The Chinese market sold 136 million units in the first half of the year, down 21.7 percent from the same period last year, setting the worst record since 2015. The consumption in the mobile phone market is weak, and the demand in the cobalt market declines.

Relevant departments also analyzed that the cobalt price fell, mainly due to the second quarter of the terminal market demand is weak, and power battery storage is more, the digital market continued to reduce, ternary precursor and four cobalt market for cobalt demand was significantly reduced. Meanwhile, the article top 10 lithium battery ternary material companies in our website also details ternary material. The cobalt market supply exceeds demand, the price fell sharply.

Cobalt products may continue to be weak

Demand side of the pressure, the short-term cobalt price trend is not optimistic. Industry professionals believe that the electrolytic cobalt, the rainstorm interrupted cobalt raw material transportation in South Africa resumed supply, some Chinese manufacturers reduce cobalt salt production, resume production of electric cobalt, electric cobalt supply is expected to increase. The current demand is still weak, cobalt alloy and magnetic material companies stock cycle shortened, company stock reduced.

The price of cobalt intermediate goods downward drive mood, lack of confidence, expected short-term decline. Cobalt powder, although the decline of cobalt powder slowed down, but the downstream demand has not recovered, cobalt carbonate prices fell, raw material cost surface support is insufficient, it is expected to still have a short-term room for decline. Professionals also believe that cobalt raw material imports decline, cobalt market supply decline.

Recently, the price and profit of cobalt are higher than that of cobalt salt, and the flexibility and easy storage characteristics of electric cobalt trading, some intermediate cobalt salt plants have reduced the production of cobalt salt, increased electric cobalt production, and the supply shortage of electric cobalt has eased. On the demand side, the demand for new energy vehicles and mobile phones is not as expected, and the reduction of companies stocking up has intensified the concern of insufficient demand.

Overall cobalt market supply and demand are double weak, the afternoon cobalt price downward pressure is still there, the short-term cobalt price downward trend is difficult to change. Recently, experts said that since 2022, the battery industry with cobalt will be differentiated, and the EV field will account for more than 3C, becoming the largest cobalt downstream consumption field. It is expected that the global supply of cobalt raw materials will basically return to normal in the second half of the year, and Indonesia will gradually become a stable supplier of global cobalt raw materials.

Cobalt products may continue to be weak


The consumption of major economies is expected to gradually recover. However, as the consumption in the second half of the year can not make up for the losses in the first half of the year, the cobalt prices will gradually fall in the future. Recent professional research reports also believe that, on the demand side, China's new energy vehicle production and sales in June have reached a new high, while the production of power battery and battery cathode materials has also recovered, and the operating rate of battery cathode manufacturers has recovered to the level of January. There is an article top 10 power battery companies in our website help you learn more about power battery.

Mobile shipments recovered in June, but fell 21.74 percent in the first half from a year earlier. Consumer demand for the electric vehicle market is strong, and the downstream operating rate picks up, but the consumer electronics market remains weak. Demand for cobalt in the new energy vehicle market has increased, but weaker mobile phone sales have led to a lack of market confidence, and cobalt prices may still remain low in the short term.

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