Viewpoint: Cobalt feedstock to stay in surplus globally

Spanish Market: Battery materials, Metals
04/01/24

Cobalt feedstock will likely remain in oversupply this year as some major mining firms with operations in the Democratic Republic of Congo (DRC) and Indonesia continue to expand output capacities.

The feedstock surplus comes as use of lithium-iron-phosphate (LFP) has surpassed ternary cathode active material (CAM) applications in the electric vehicle (EV) battery sector. LFP batteries do not require cobalt.

Intermittent price upswings for copper and nickel — from which cobalt is produced as a byproduct — have led to cobalt capacity expansions since 2021 among some major mining firms in the DRC and Indonesia, the world's main production hubs for cobalt feedstock.

Argus estimates that global supply of cobalt will increase by 13pc from 2023 to 245,000t of metal equivalent this year.

The increment is to largely come from expansions at the KFM and Kinsevere copper-cobalt mines in the DRC owned by Chinese diversified metal producer CMOC and mining company MMG respectively, as well as Chinese battery metal firms Huayou Cobalt's Huafei, GEM's QMB and Ningbo Lygend's mixed nickel-cobalt hydroxide precipitate (MHP) projects in Indonesia.

Others that are being developed include Chinese metals producer Jinchuan's Musonoi copper-cobalt project in the DRC; DRC's mining firm Chemaf's Mutoshi copper-cobalt mine; and Indonesian MHP projects invested in by Chinese battery CAM producers GEM, Huayou, Brazilian mining firm Vale and US automaker Ford. These facilities are expected to gradually come on stream by the end of 2024 or in the next few years.

LFP outweighs ternary CAM

LFP batteries have maintained a cost advantage over ternary batteries following Beijing's cut to and subsequently removal of purchase subsidies for new energy vehicles (NEVs), as well as deeper declines in lithium prices in China throughout 2023 compared with cobalt prices.

Argus-assessed prices for 99.5pc grade lithium carbonate averaged 258,806 yuan/t ($36,000/t) ex-works in 2023, down by around 54pc from 2022, while Argus-assessed prices for 20.5pc grade sulphate averaged Yn38,469/t ex-works in 2023, down by around 53pc on the year.

Installed volume of LFP power batteries in China exceeded that of nickel-cobalt-aluminium/nickel-cobalt-manganese NCA/NCM ternary batteries for the first time in July 2021 since the start of 2019, when NCM/NCA batteries had a higher market share. LFP power batteries have since gained a stronger position in the Chinese market following the central government's decision to curtail purchase subsidies for NEVs during 2021-22 and abolish the policy in early 2023.

Demand for LFP CAM surpassed that of ternary CAM in China in 2021 and in the global market in 2022 respectively. Demand for LFP CAM was about 50pc more than for ternary CAM in 2023, Argus estimates.

Multiple automakers outside China have begun using LFP cells or are considering using them to lower their EV manufacturing costs. US-based Tesla has switched all of its standard-range vehicles to LFP batteries since the end of 2021. US EV maker Rivian likewise plans to transition its standard battery packs to LFP. South Korea's Hyundai in March 2022 unveiled a plan to ramp up its use of LFP batteries. European carmakers and battery producers have also taken steps towards using new battery chemistries, which has quickly built out new supply architecture for LFP and sodium-ion batteries in recent years. And Chinese battery producer Gotion started supplying LFP batteries to Volkswagen (China) in 2022, with plans to ship LFP batteries to Volkswagen outside China in the future.

Market participants expect LFP to continue to dominate the power battery CAM market globally in 2024. Argus estimates that global LFP output will reach 1.9mn-2mn t this year, up by 30pc from 2023 and far above the 1.1mn t of NCM output forecast for 2024, up by 10pc on the year.

Demand for cobalt-containing ternary CAM is expected to rise at a slower pace than for LFP, market participants said, meaning cobalt demand growth should continue to lag behind the rise in cobalt supplies.

Global cobalt demand will rise by 8.7pc from 2023 to 215,000t of metal equivalent this year, Argus predicts, but this may exacerbate the cobalt surplus given an estimated supply rise of 13pc over the same period.

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29/04/25

Trump tweaks tariff burden on US automakers

Washington, 29 April (Argus) — President Donald Trump's administration has offered to offset the 25pc tariff on foreign-made auto parts, scheduled to start on 3 May, and to exempt auto parts from any additional tariffs they face from other import taxes imposed in recent months. Trump, who today announced the change in tariffs ahead of a political rally in Michigan, a key US car manufacturing state, cast his decision in terms of giving US automakers a reprieve from his tariff policies. But as in other cases when he changed his mind on tariffs, the US auto industry will still face a substantial burden from import taxes imposed since Trump took office. Trump's 25pc tariffs on foreign cars went into effect on 3 April, and a 25pc tariff on imported auto parts was scheduled to go into effect on 3 May. Under an executive order Trump signed today, the auto makers can be partially refunded the cost of the tariffs on imported auto parts, subject to a cap of 15pc of the value of an assembled car until April 2026, dropping to a 10pc cap until April 2027. The refund cannot exceed 3.75pc of a car's manufacturer suggested retail price in the first year, dropping to 2.5pc in the second year. The idea behind the adjustment is to force US automakers to become wholly reliant on auto parts made in the US in the next two years, commerce secretary Howard Lutnick explained. In theory, at least, a US-made car that is made with 85pc domestic components would not face an additional tariff cost. A separate executive order clarifies that the tariffs on foreign-made cars and auto parts will not be calculated in addition to any other tariffs Trump has imposed on Canada and Mexico, and will not be counted on top of tariffs imposed on steel, aluminum and their derivative products. "This is just a little transition," Trump told reporters at the White House today, announcing the latest reversal of his tariff policy. "We're just giving them a little chance, because in some cases, they can't get the parts fast enough." By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US consumer confidence falls for 5th month in April

29/04/25

US consumer confidence falls for 5th month in April

Houston, 29 April (Argus) — US consumer confidence fell in April to the lowest level since the onset of the Covid-19 pandemic five years ago, and consumer expectations fell to the lowest since October 2011, according to a Conference Board survey released today. The consumer confidence index fell by 7.9 points to 86 in April, the fifth consecutive monthly decline and the lowest since the US was emerging from a brief recession in 2020 that was triggered by the pandemic and the related economic shutdown. The expectations index, based on US consumers' short-term outlook for income, business and labor market conditions, dropped by 12.5 points to 54.4, well below the threshold of 80 that usually signals a recession ahead. The three segments of the expectations index — business conditions, employment prospects and future income — "all deteriorated sharply, reflecting pervasive pessimism about the future", according to the Conference Board. "Tariffs are now on top of consumers' minds, with mentions of tariffs reaching an all-time high," the board said. "Consumers explicitly mentioned concerns about tariffs increasing prices and having negative impacts on the economy." The share of consumers expecting fewer jobs in the next six months was 32.1pc, nearly as high as in April 2009 during the Great Recession. The present situation index, based on consumers view of current business and labor market conditions, fell by 0.9 to 133.5. "High financial market volatility in April pushed consumers' views about the stock market deeper into negative territory", with 48.5pc expecting stock prices to fall in the next 12 months. Average expectations for US inflation levels in 12 months rose to 7pc, the highest since November 2022. The Conference Board is a non-partisan, non-profit think tank based in the US. Its monthly consumer confidence survey is based on an online sample of consumers. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japanese ferrous scrap exports remain strong in March

29/04/25

Japanese ferrous scrap exports remain strong in March

Shanghai, 29 April (Argus) — Japan's ferrous scrap exports dipped slightly in March, but overall volumes remained high on weaker domestic scrap demand in Japan. Exports totalled 645,000t, down by 3pc from February, but still 25pc higher than a year earlier, according to Japan's customs data. Total exports in the first quarter rose by 17pc on the year to 1.87mn t. Shipments to South Korea continued to decline and local mills faced pressure from low-priced steel imports and a sluggish construction sector. South Korean mills were largely focused on domestic purchasing and fulfilling long-term contracts with Japanese suppliers, and avoided spot purchases, according to market sources. Vietnam remained Japan's largest scrap buyer, with volumes rising by 23pc on the year to 839,000t in the first quarter of 2025. Scrap and steel demand in Vietnam rebounded as construction activity picked up after the lunar new year and steelmakers entered the seaborne market to restock. Exports to Bangladesh tripled in January-March compared with 2024, signalling strong growth potential in south Asia. Shipments to India also surged, rising from 10,663t in January-March 2024 to 61,693t in 2025. Japanese suppliers increasingly targeted new markets in the face of weakening demand from traditional export destinations. Japanese scrap exporters are expected to stay active in overseas markets on weakening domestic demand. Japan's ministry of economy, trade and industry (Meti) forecasts ordinary steel demand from the construction sector to fall to 3.9mn t in April-June, a 2.4pc decline on the year. Japan's ferrous scrap exports t Country Mar-25 m-o-m % ± y-o-y % ± Jan-Mar y-o-y % ± Vietnam 287,684 -4.2 37.0 838,562 22.6 South Korea 111,958 -4.3 -28.6 353,564 -24.7 Bangladesh 102,276 0.1 133.7 274,023 200.4 Taiwan 63,150 25.2 78.7 142,811 1.5 Others 80,183 -15.7 14.5 257,706 20.7 Total 645,251 -3.0 25.1 1,866,667 16.7 Source: Japan customs Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Indonesia imposes new nickel royalty rates

29/04/25

Indonesia imposes new nickel royalty rates

Singapore, 29 April (Argus) — The Indonesian government has implemented new royalty rates, also known as the non-tax revenue or Penerimaan Negara Bukan Pajak (PNBP) for nickel products, effective from 26 April. Some of the effective royalty rates were slightly adjusted from the previous proposal on 8 March. The PNBP royalty rate for nickel ore remained the same as the proposal, which was revised from a fixed 10pc to a range of 14-19pc, depending on the Harga Mineral Acuan (HMA) nickel price — the reference price for nickel ore. Implemented nickel pig iron (NPI) royalty rates were also as proposed at 5-7pc, depending on the HMA, from a flat rate of 5pc. The Indonesian government set the new royalty rate for ferronickel at 4-6pc, a slight drop from the proposed 5-7pc but an increase from the previous fixed 2pc. Royalty rates of nickel matte were similarly imposed lower at 3.5-5.5pc, down from the proposed 4.5-6.5pc but higher than the previous 2-3pc. Royalty rates for nickel mixed-hydroxide-precipitate (MHP) were newly introduced at a flat rate of 2pc. The new royalty rates are expected to increase production costs in the longer term but is likely to have limited immediate impact on prices. The nickel industry and government are in ongoing discussions over profitability concerns and possibility of delaying the implementation, but other details could not be confirmed. Nickel royalty rates HMA nickel ($/t) Proposal on 8 March (%) Implemented rates (%) Nickel ore <18,000 14.0 14.0 18,000 < 21,000 15.0 15.0 21,000 < 24,000 16.0 16.0 24,000 < 31,000 18.0 18.0 ≥ 31,000 19.0 19.0 NPI <18,000 5.0 5.0 18,000 < 21,000 5.5 5.5 21,000 < 24,000 6.0 6.0 24,000 < 31,000 6.5 6.5 ≥ 31,000 7.0 7.0 Ferronickel <18,000 5.0 4.0 18,000 < 21,000 5.5 4.5 21,000 < 24,000 6.0 5.0 24,000 < 31,000 6.5 5.5 ≥ 31,000 7.0 6.0 Nickel matte <18,000 4.5 3.5 18,000 < 21,000 5.0 4.0 21,000 < 24,000 5.5 4.5 24,000 < 31,000 6.0 5.0 ≥ 31,000 6.5 5.5 MHP Flate rate - 2.0 Source: Indonesian government Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia’s Fortescue lifts iron ore sales in Jan-Mar

29/04/25

Australia’s Fortescue lifts iron ore sales in Jan-Mar

Sydney, 29 April (Argus) — Australian metal producer Fortescue shipped 46mn wet metric tonnes (wmt) of iron ore on a 100pc basis in January-March, up by 6.5pc on the year, despite facing weather challenges. Fortescue left its export guidance for the 2025 financial year ending 30 June unchanged at 190mn-200mn wmt of ore, including 5mn-9mn wmt of magnetite concentrate from its Iron Bridge mine, in its January-March quarterly report on 29 April. The company sold 143mn wmt of ore, including 4.7mn wmt of Iron Bridge magnetite, in the nine months to 31 March. Fortescue increased its shipments across every product category on the year in January-March (see table) , because of the partial ramp-up of Iron Bridge and an ore car derailment in January-March 2024. These factors offset the impact of multiple cyclone-related port disruptions in Western Australia (WA) over January-February. Fortescue's Iron Bridge magnetite sales tripled on the year but remained flat on the quarter in January-March. The company is reviewing the 22mn t/yr mine's ramp-up schedule and will announce a plan to reach full capacity by late June. Fortescue originally planned to increase Iron Bridge's output to capacity by September, before it in February backed away from that date. The company improved ore processing circuits at the mine during the last quarter, replacing the lining of air classifiers, Fortescue told investors on 29 April. Fortescue's iron ore fines products accounted for 55pc of its total sales in January-March, down slightly from 56pc a year earlier. Iron ore fines tend to be less valuable than similarly graded iron ore lumps, as they require additional processing. Fortescue's iron ore cash costs decreased by 7pc from $18.93/wmt a year earlier to $17.53/wmt, on the back of mine performance improvements. The company left its cash cost guidance for the 2025 financial year unchanged at $18.50-19.75/wmt. Fortescue's cash costs hovered in the upper end of its guidance over the first half of the 2025 financial year, reaching $19.20/wmt. Many of Fortescue's WA competitors experienced sales declines in January-March, because of cyclone-related disruptions. WA iron ore shipments from global metals firm BHP and UK-Australian producer Rio Tinto declined by 7.8pc and 18pc on the year, respectively, during the quarter. Argus ' iron ore fines 62pc Fe (ICX) cfr Qingdao price has been falling since late-January. It was last assessed at $99.10/t on 28 April, down from $105.25/t on 31 January. By Avinash Govind Fortescue Shipments by Product mn wmt Jan-Mar '25 Jan-Mar '24 Oct-Dec '24 Jul-Mar '25 Jul-Mar '24 y-o-y Change (%) YTD Change (%) Iron Bridge Concentrate 1.5 0.5 1.5 4.7 0.6 200.0 683.0 West Pilbara Fines 3.4 3.0 3.6 10.6 11.6 13.0 -8.6 Kings Fines 4.0 3.9 4.1 11.8 11.2 2.6 5.4 Fortescue Blend 17.0 17.0 18.0 53.0 58.0 3.0 -10.0 Fortescue Lump 1.8 1.6 1.9 5.8 6.1 13.0 -4.9 Super Special Fines 18.0 18.0 20.0 58.0 50.0 2.9 15.0 Other 0.0 0.0 0.0 0.0 0.2 - -100.0 Total 46.0 43.0 49.0 143.0 138.0 6.5 3.8 Fortescue Argus' iron ore cfr Qingdao prices ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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