Cobalt Price seems stable but still weak

 180,000 yuan per tonne for cobalt metal a ‘good price to restock’ 
Chinese cobalt metal buys should top up inventories when prices in China drop to 180,000 yuan per tonne ($10.52 per lb, less China-VAT), 
the cobalt 99.8% Co min, exw China price at 210,000-230,000 yuan per tonne on July 12, down nearly 68% from a multi-year high of 675,000-690,000 yuan per tonne in April 2018. The latest price is also close to the lowest level in almost three years. The domestic Chinese cobalt metal price fell to 180,000-205,100 yuan per tonne in June 2016, according to our historical data. 


But even as the current low price boosts some restocking, other market participants doubted such buying will cap the downtrend immediately or even revive the price, citing oversupply in the cobalt market. 


Cobalt-free batteries won’t be mainstream yet 
There were heated discussions as to whether cobalt-free batteries will power electric vehicles (EVs) soon, following recent news that SVOLT, a local Chinese lithium-ion battery producer, will develop cobalt-free EV batteries. 

Professor Hu Guorong, from Central South University in China, advised battery producers to develop cobalt-free battery only when the technology is mature enough to maintain a stable material structure for batteries without cobalt in Battery conference recently. 

“There are still risks in applying cobalt-free battery to EVs,” Hu said. “We need to develop cobalt-free battery in accordance to technology developments.” 

The cobalt standard grade, in-whs Rotterdam benchmark price at $12.65-13.10 per lb on Friday July 12, the lowest price since October 2016. 

Meanwhile, given an increasingly significant cobalt supply surplus, which we  forecast at 16,000 tonnes in 2020, consensus is the cobalt price will be bogged down until the surplus narrows extensively.Some  researcher also forecast the average cobalt benchmark price for the second half year of 2019 at $12-13 per lb, and that for 2020 at $12.40 per lb. 

“There won’t have a lot of battery producers following [SVOLT] when the cobalt price remains low,” a precursor materials producer said. 

LFP, LMO battery to maintain market share in EV sector 
Despite a broad preference among EV makers for nickel-cobalt-manganese (NCM) lithium-ion batteries, which have higher driving range and energy density, lithium iron phosphate (LFP) and lithium-ion manganese oxide (LMO) batteries will maintain a certain market share, according to Liu Yanlong from China Industrial Association of Power Sources. 

China’s EV subsidy policy is likely to be phased out from 2020, and some EV makers have turned back to safe and lower cost batteries, such as LFP and LMO battery, adding that safety would always be the priority for EV makers even when they pursue high driving ranges. 

 

• [Editor:admin]