Price for standard-grade cobalt dips on year-end soft demand

Weak demand for cobalt chemicals globally pushed the price of standard-grade cobalt down by 3.45% on Monday, December 5

Fastmarkets’ daily price assessment for cobalt, standard grade, in-whs Rotterdam, was $19.75-22.25 per lb on December 5, down from $21.25-22.25 per lb in the previous session.

According to many market participants, the demand for cobalt from China was weakening with the market heading toward two holiday periods, for Christmas and then the Lunar New Year in January, affecting the downstream demand in India and Europe.

“In China, most of the [Covid-19] lockdown restrictions are still in place, even though there was an announcement to remove most of the restrictions last week,” one consumer said.

“Then there is Chinese [Lunar] New Year. In China, there is more cobalt available to buy so the price is competitive. The US market is limited due to the tariffs on Chinese materials. So Chinese materials are flowing into Europe, but Europe is heading to Christmas,” he added.

“There is weak demand for cobalt chemicals and the cobalt sulfate price is down again,” a European producer said. “The demand outlook for cobalt standard-grade from a China perspective looks bearish.”

The demand for cobalt, particularly in Europe, was reported to be very low, and many market participants told Fastmarkets that there were few consumer inquiries because it is the end of the year. Some sources also said that there was not enough demand in the electric vehicle (EV) sector yet in Europe because there was not enough battery manufacturing.

One market participant told Fastmarkets that it was suggested in a meeting at the London Metal Exchange last week that this could be the quietest market quarter in the past 20 years.

A few European traders said that many companies wanted to have low inventories at the end of the year, and would start taking materials again next year.

“Once [the price falls] below $20 [per lb] for standard grade [cobalt], we expect institutional investors to be involved for long-term inquiries, but not in the spot market,” one trader told Fastmarkets.

Meanwhile, the price assessment for cobalt, alloy grade, in-whs Rotterdam, was stable at $23.00-24.50 per lb on Monday, unchanged from the previous session and widening the gap between alloy and standard grade prices.

Demand from the US market was still strong and some cobalt brands, such as Nikkelverk and SMM, were selling at premiums, leaving the alloy grade price at a premium over standard grade.

Keep up to date with the latest news and insights on our cobalt market page.

What to read next
Interest in recycling battery raw materials in the US has increased, particularly from the electronics and lithium-ion battery sectors, and due in part to the Inflation Reduction Act (IRA), according to New York-based Glencore trader Mary Schilling.
Global copper futures prices are in a frenzy, with record highs being logged on the New York-based Commodity Exchange (Comex), London Metal Exchange and Shanghai Futures Exchange (SHFE) in recent days
The South Korea government has started to build up a national stockpile of lithium reserves through the state-owned Korea Mine Rehabilitation & Mineral Resources Corp (KOMIR), Fastmarkets was told on Tuesday May 21
A host of Chinese battery manufacturers have been increasing their production of electrolytic nickel to reap gains from strong futures prices because the growth in downstream demand for electric vehicles (EVs) is slowing, Fastmarkets heard on Tuesday May 21
A surge in recycling capacity in the US aluminium industry is coming in the next few years while for now it continues to meet most of its primary aluminium needs from Canada.
Fastmarkets rounds up the key discussion points at the 30th annual Cobalt Institute conference in New York, from May 12-14.