Cobalt sulfate continues to decline

Cobalt faces its first major test after a two-year surge in demand for electric vehicles. In China, the top consumer market, cobalt prices have continued to decline, which may indicate that there is still enough cobalt raw materials for manufacturers to use.

Data show that cobalt sulfate, used in car batteries and electronics, fell last week to its lowest level in a month and a half.

Although the demand for the electric vehicle industry is still expected to rise rapidly in the next few years, the downturn in battery manufacturer procurement indicates that there is no supply shortage in the market. BenchmarkMineralIntelligence analyst CasparRawles pointed out in an interview, "At present, China's market sentiment and recent trends are quite unfavorable, of course, including chemical demand."

Cobalt has caught the attention of investors because the cars produced by global manufacturers are powered by cobalt batteries, not internal combustion engines. The price of materials in the Democratic Republic of the Congo's main mineral deposits has soared owing to concerns that there is not enough supply to meet the growth in demand. According to Bloomberg new energy finance last month, a possible future shortage of raw materials is one of the main risks to automakers 'electricity-driven plans.

The price of cobalt sulfate provided in the form of coarse salt is still more than 200% higher than two years ago.

It is understood that one of the main factors that currently weigh on cobalt sulfide is that battery manufacturers did not order a large number of anode power supplies in the third quarter. Second, traders holding cobalt sulfate decided to sell due to the impact of global prices. Third, it can be extracted from old cell phone batteries or other cobalt-rich waste as more recycling methods increase supply.

Weak demand is the most important driver. Cobalt sulfate prices have more room to fall because the market may be over-abundant. Whether it is cobalt metal or cobalt derivatives, there is currently no demand gap. The rapid investment by Chinese companies in cobalt processing plants could also lead to an oversupply of sulfates, according to Benchmark General's Rawles.

For cobalt's post-market, the current price difference between the inside and outside of the cobalt price is serious, and the decline in the outside world has always lagged behind the domestic market. Domestic smelters are not only worried that the price of foreign media has fallen by more than the domestic price, but also worry that the price increase of foreign media deviates from domestic actual demand. Contradictory mentality under the low purchasing intention of raw materials, more choice to accelerate the conversion of raw materials to finished products, and actively reduce the inventory of finished products. The current lithium price continues to fall. Although the inventory level of the positive material supplier is low, it still holds a bearish mentality and procurement is not positive. The demand for TOP materials plants will increase in the third quarter, but the overall demand for the industry will increase only limited. Lithium carbonate still has some downward pressure when the supply is less likely to decrease.

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