China’s Jan-Sep cobalt intermediate imports outstrip 2023 total, oversupply endures

Chinese imports of cobalt intermediates totaled 18,408 tonnes (metal content) in September, up by 18.42% month on month and 101.59% year on year, according to data from China’s General Administration of Customs (GACC).

Imports of cobalt intermediates over the first nine months of 2024 amounted to 138,848 tonnes (metal content), the data shows, significantly exceeding the 114,263 tonnes (metal content) imported during the whole of 2023.

Market participants attributed the increase in import volumes to the continuous growth in supply and relatively low prices for cobalt hydroxide, the key cobalt intermediate.

The elevated inflows have allowed the oversupplied condition of the domestic market to continue and fuelled anxiety among participants about the market’s ability to cope with such high quantities, sources said.

A significant boost in mining capacity in the Democratic Republic of Congo (DRC) has been a key driver of the higher cobalt production this year, according to market participants.

Notably, CMOC, one of the largest mining enterprises in the DRC, announced that its mined production of cobalt metal had totaled 54,024 tonnes in the first half of 2024 – a 178% increase compared with the year-earlier period.

The company also unveiled its production guidance for 2024, expecting to produce between 60,000 and 70,000 tonnes of cobalt throughout the year. The company produced 55,526 tonnes in 2023.

“No one worries about the supply of cobalt considering the increasing mine capacity outstrips market demand,” a cobalt hydroxide consumer said.

“Most buyers are sitting on substantial inventories. The cobalt hydroxide market specifically faces a persistently high level of supply, which has gradually built up over time amid steady production hikes and sluggish demand from downstream buyers,” a trader said.

The global cobalt market is expected to be oversupplied by 22,000 tonnes (metal content) in 2024, according to Fastmarkets research.

Supply glut drives down prices

The rising imports of cobalt intermediate products in China have also exacerbated existing pressure on prices, with cobalt hydroxide prices currently sitting at historical lows.

Fastmarkets’ daily price assessment for cobalt hydroxide 30% Co min, cif China was $6.10-6.25 per lb on Monday October 21, unchanged since October 16 and at its lowest level since the assessment was launched in February 2019.

Initially published as an index, the assessment shifted to a price range published on a daily basis in September 2023 to better reflect the volatility in the market.

The cobalt price reached a 2024 high of $7.10-7.25 per lb in the middle of March, but has largely trended downward since then amid pressure from the market’s oversupplied condition.

“The imports of cobalt hydroxide have continued the rise this year. Even though there were some periods of logistical delays from DRC to China, imports volumes remain at a high level, which generates oversupply and brings no support to prices,” a second cobalt hydroxide consumer said.

“Rising supply has depressed cobalt prices further, and current prices are already at a historical low of at least the past five years,” a second trader said.

Bearish sentiment for Q4

Most market participants held a bearish view of the market for the fourth quarter, expecting prices to linger at low levels due to sufficient supply and tepid downstream demand.

“The oversupply situation could not be resolved in a short-term period, and I think cobalt prices will remain under pressure in the rest of this year, or even into next year,” a cobalt hydroxide seller said.

“We’ve seen continuous declines in cobalt sulfate prices due to lackluster demand from our customers. This has led to a reluctance among buyers to stock inventory, which in turn diminishes appetite for the upstream cobalt hydroxide needed to produce our products,” a cobalt sulfate producer source said.

“I am still holding watchful attitude towards the market, but if oversupply and weak demand continues, prices will not see significant improvement in the rest of this year,” the producer source added.

Fastmarkets has more than 150 years of specialist commodity expertise. As well as our thousands of metals prices, we have the benchmark cobalt price and a leading cobalt hydroxide price. Keep up to date with cobalt price shifts with access to cobalt price charts, data and expert analysis. Find out more here.