The cobalt market is looking to China as key to recovery given its role as the world's biggest cobalt consumer. "We are not willing to compete against some aggressive discounts so the worst case scenario is we are more exposed to the spot market," a second miner said. Like metal, some believe that many could turn to the spot market with consumers reluctant to lock down contracts. There is so much uncertainty around the payable because international prices are not reflecting the Chinese market," the miner said. "Big refiners won't even discuss term contracts. "Metal prices are increasingly disconnected from the salts markets, and while buyers have been delaying shipments to cope with increased raw material costs, it doesn't solve the root problem," a Chinese refiner said. In China, some have proposed fixed pricing or tagging hydroxide to sulfate prices, which they feel is more reflective of market fundamentals. This, coupled with declining prices over the last six months has made consumers skittish about signing contracts. With divergent opinions surrounding the metal and salt markets, sources said 2023 contract negotiations have been progressing slowly.Īpart from mine ramp-ups in the DRC, growing volumes of mixed hydroxide precipitate from Indonesia were expected to bring as much as 20,000 mt of metal into the market next year. Contract negotiations stall on diverging metal, salt dynamics This has led to buyers requesting steep discounts or fixed pricing, with some saying that current mechanisms were "unsustainable" for the battery industry. Sources said current pricing mechanisms, payables tagged to metal, lifted cobalt hydroxide to trade at a premium over sulfate, causing refiners to operate at a loss through most of 2022. Platts assessed 30% Co cobalt hydroxide at $12.10/lb CIF China Nov. There is no firm information as to when the ban will be lifted, but sources said there were stocks waiting to be exported from the mine site.ĭespite this, sources said an oversupplied market caused hydroxide prices to tumble 64.5% from its peak of $34.10/lb on April 27. With no green shoots of recovery in sight, supply-side disruptions came into focus as the only supportive factor.Ĭhina Molybdenum's copper-cobalt mine, Tenke Fungurume, has been subjected to an export ban since July. Hydroxide free-falls though supply risks remain 30, down from $25.10-$26.50/lb a month ago, S&P Global data showed. Platts assessed cobalt metal at $21.25-$23.85/lb IW Rotterdam in the week to Nov. 17 failed to lift the market, with sources describing the volumes as "underwhelming". Reports of China stockpiling cobalt metal on Nov. "Last year, we were talking about flat or premiums, now we are giving small discounts." "We still signed a few contracts, but for small quantity in North America ," one miner said. Others were more bearish as spot metal prices continued to fall. 24-28 at discounts "not differing too much" from 2021, which was attributed to no new supply and more units designated to the EV market via multi-year contracts. With Europe suffering from high energy prices and inflation, North America has been more resistant to these headwinds leading to a two-tier spot market where metal sold in the US for alloying has commanded a premium over the European market.Īlloy grade sellers reported signing term contracts prior to LME Week over Oct. The tight market a year ago allowed sellers to include premiums into term contracts and move buyers on to the mid-point of the spot assessment range, up from the traditional low end. 30, down 55% from its peak of Yuan 120,000/mt on March 9, S&P Global Commodity Insights data showed. Platts assessed battery-grade 20.5% Co cobalt sulfate at Yuan 54,000/mt DDP China Nov. "The scrapping of EV subsidies in China next year is definitely impacting consumers' appetite for raw materials," a Chinese precursor maker said. Sources reported of high inventories across the supply chain and battery makers cutting production, putting further pressure on prices. While the Chinese EV sector has since rebounded, the consumer electronics sector, making up 30% of global cobalt demand, struggled against weaker consumer spending. However, the market spiraled into a downturn from end-March all the way to July as sweeping pandemic control measures were implemented across China to control the spread of COVID-19, impacting logistics and subsequently the economy. Sulfate plunges on sluggish consumer electronicsĬhinese cobalt sulfate prices started the year strong, hitting a multi-year high of Yuan 120,000/mt as logistical bottlenecks in Durban tightened the inflow of cobalt hydroxide, pushing production costs higher. This, after 2022 was set to have been a boom year for the metal as it was expected to ride on the back of a post-pandemic demand recovery and gain traction from the electric vehicle sector. Receive daily email alerts, subscriber notes & personalize your experience.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |