Deliveries of battery raw materials from Chinese producers to consumers in South Korea and Japan are continuing as usual despite a recent surge in the number of people infected by the novel coronavirus (2019-nCoV) in the latter two countries, Fastmarkets understands.
But suppliers in China and consumers in South Korea and Japan are both closely monitoring the coronavirus situation, wary of a possible disruption to the battery supply chain should things worsen.
“We have been talking to our customers in South Korea regularly these days in order to have updates on their production status. Although exports are normal for now, our customers have implied they might request us to delay shipping materials to them if the virus situation in the country gets worse,” a battery precursor materials producer source said.
A source from a South Korean battery producer told Fastmarkets that battery production at Korean plants has not been affected by the coronavirus outbreak as yet, and that they are carrying out very strict precautionary measures to ensure the safety of those working in the plants.
“We are quite vigilant because in South Korea, if one worker is confirmed to have been infected by the virus, the operation at the whole plant needs to be suspended,” the source said.
Meanwhile, prices for battery raw materials in China have softened this week; the spot price for cobalt sulfate, the raw material used to produce the nickel-cobalt-manganese (NCM) lithium-ion battery that is commonly used in electric vehicles, fell by around 1% from the end of last week after producers lowered their offer prices to lock in profits.
Fastmarkets assessed the price for cobalt sulfate 20.5% Co basis, exw China at 56,000-58,000 yuan ($7,953-8,238) per tonne on Wednesday February 26, widening downward by 1,000 yuan per tonne from 57,000-58,000 yuan per tonne on February 21.
The price for cobalt tetroxide, the raw material used in the production of the lithium cobalt oxide (LCO) battery that is commonly used in electronic products, was unchanged midweek amid limited spot trades.
Fastmarkets’ price assessment for cobalt tetroxide 72.6% Co min, delivered China was 210,000-220,000 yuan per tonne on February 26, unchanged since February 19.
But cobalt tetroxide producers are finding it increasingly difficult to conclude business at 220,000 yuan per tonne, citing a deteriorating upstream chloride market.
The spot offer for cobalt chloride dropped to about 66,000-67,000 yuan per tonne, compared with around 70,000 yuan per tonne one week ago, market participants told Fastmarkets.