The continuing challenges of oversupply in the market, as well as a drop in cobalt futures prices, have added to a perceived risk felt by some market participants.
One said that the cobalt metal price rises in March had stalled following a sustained decline in cobalt sulfate prices in China.
“Market confidence has been shaken by the daily drops in the sulfate price,” he added. “Traded volumes there are low, and there is minimal intent to restock despite the [price] drops.”
Fastmarkets’ twice-weekly assessment of the price for cobalt sulfate, 20.5% Co basis, exw China, was 38,500-40,000 yuan ($5,597-5,815) per tonne on March 31. This compared with 41,000-43,000 yuan per tonne on March 1.
No price assessment for April 5 was published due to a public holiday in China, but some market participants reported hearing bids around 35,000 yuan per tonne at the beginning of this week.
Tight prices for cobalt standard-grade in Europe
Despite the uncertainty, cobalt standard-grade prices in Europe tightened, with buyers and sellers now conducting business in a narrower range than a month earlier. The price spread, low to high, was $0.90 per lb on April 6, compared with $1.65 per lb on March 6.
“Most sellers don’t want to sell low now we’re in the second quarter, but the buyers don’t want to pay too much, so most business is either side of $17 per lb for now,” one trader said.
Fastmarkets’ daily price assessment for cobalt, standard grade, in-whs Rotterdam, was $16.50-17.40 per lb on April 6, unchanged from the day before but narrowing from $16.45-17.50 per lb at the beginning of the week.
“The weak sentiment for cobalt hydroxide and sulfate undermines [the price of cobalt] metal. The chemical buyers are not really looking to buy metal, given how cheap hydroxide is,” a second cobalt trader said.
A third trader felt that the price risk from intermediates had less effect.
“Yes, there is pressure from sulfate and hydroxide,” he said, “but metal is a different market, the fundamentals are different, and consumers are still calling off [from the maximum] volumes [they could take] on their long-term agreements.”
Others said that while the chemicals sector was well supplied throughout the supply chain, market participants in other sectors had been finding it more challenging to secure cobalt metal on a spot basis throughout the week.
“All the feed has gone to batteries – whatever is produced is being sold there,” a fourth trader said, adding that finding material for shipment within the current quarter, directly from producers, was difficult.
Cobalt alloy-grade prices have been unchanged since March 22, with market participants seeing more stability in comparison to standard grade.
Fastmarkets’ daily price assessment for cobalt, alloy grade, in-whs Rotterdam, was $17.75-18.75 per lb on April 6.
“Alloy grade is more certain,” the fourth trader said. “Liquidity has been a little thin recently, but there are traded volumes within range, with sellers unwilling to sell [at prices lower than that].”
Keep updated with the latest news and insights on our cobalt market page.
