Lower feedstock imports, firm demand boost Co prices
A fall in cobalt feedstock imports to China in August on lower logistics efficiency at Durban port in South Africa coupled with firm demand from the downstream new energy vehicle and 5G telecommunication sectors have bolstered cobalt prices.
Argus assessed prices for 99.8pc grade cobalt metal higher at 366-386 yuan/kg ($56.3-59.4/kg) ex-works today, up by 39pc since the start of 2021. Import prices for 30pc min grade cobalt hydroxide were assessed at $21.20-21.60/lb cif China on 21 September, up by 67pc since early this year.
Durban port is a key transit port for cobalt feedstock exports from the global main production hub of the Democratic Republic of Congo.
China imported 21,644t of cobalt intermediate products, with 5,627t of metal equivalent in August, down by 24pc from a year earlier and by 13pc from July. The country imported 2,340t of cobalt concentrates, corresponding to 164t of metal equivalent, in August, down by 56pc from a year ago but up by 34pc from July.
Combined imports of cobalt raw materials, including concentrates and intermediate products, were 5,791t of metal equivalent in August, down by 26pc from a year earlier and by 12pc from July. January-August imports of cobalt raw materials rose to 52,839t of metal equivalent, up by only 7pc from a year earlier. China also imported 246,938t of mixed hydroxide precipitate in January-August, up from 164,474t a year earlier.
Low logistics efficiency at Durban port caused by the Covid-19 pandemic coupled with a civil unrest in the country from early July led to port congestions and shipment delays and a decline in China's August cobalt feedstock imports.
Most market participants say it is difficult for feedstock imports to China to rise in September. "Logistics at Durban port was severely congested when the unrest in South Africa broke out so our shipment delays in August was more serious than July," said a major cobalt feedstock supplier.
Demand from the computer, communication and consumer electronics (3C) and electric vehicle (EV) sectors remained strong in the first eight months of this year, although the 3C sector showed signs of weakening from the second quarter.
Domestic mobile phone shipments increased by 12.3pc from a year earlier to 227mn units during January-August, including 168mn of 5G phone shipments, which rose by 79.7pc on the year, according to the China Academy of Information and Communications Technology.
China's 5G mobile phone users stood at 419mn at the end of August, up significantly by 220mn from the end of 2020, according to data issued by the ministry of industry and information technology.
January-August NEV output increased by 193pc on the year to 1.813mn, with sales up by 194pc to 1.799mn units, according to the China Association of Automobile Manufacturers.
Total power battery output rose by just over 200pc to 111.5GWh in January-August, while installed volumes were up by 176.3pc to 76.3GWh.
Production and installed volumes of ternary batteries in the eight-month period hit 53.2GWh and 40.9GWh, rising by 137.2pc and 111.2pc, respectively, on the year and accounting for 47.9pc and 53.8pc of total battery volumes.
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