Argus Media Limited

09/06/2021 | News release | Distributed by Public on 09/06/2021 12:16

China’s January-August cobalt tetroxide output rises

China's cobalt tetroxide output totalled 59,000t during January-August, up by 36.5pc from a year ago, driven by increased demand from the computer, communication and consumer electronics (3C) industry, particularly in the first quarter.

Huayou Cobalt, CNGR and GEM are China's top three cobalt tetroxide producers, with their combined output accounting for 68pc of the country's total production.

Most Chinese tetroxide is sold in the domestic market, with a small portion for the international market. China exported 4,490t of cobalt tetroxide during January-July, mainly to South Korea and Belgium, up by 36.2pc on the year, and imported only 74t during the period, customs data show. The year-earlier import volume of cobalt tetroxide is unavailable for comparison.

The global shift to working from home and remote learning has boosted sales of portable PCs and tablets, underpinning demand for lithium cobalt oxide (LCO) and cobalt tetroxide since the outbreak of Covid-19. Rapidly rising sales of 5G phones is also accelerating growth in demand for LCO and cobalt tetroxide.

Global shipments of tablets rose by 3.9pc from a year earlier to 40.4mn units in the second quarter of 2021 and totalled 80.35mn during January-June, up by 24.4pc on the year, according to US-headquartered market research firm International Data (IDC).

China's 5G phone shipments totalled 150.6mn units during January-July, up by 94pc from a year earlier. These accounted for 74pc of the country's total mobile phone shipments of 203mn during the period, according to the China Academy of Information and Communications Technology (CAICT).

Demand for LCO and cobalt tetroxide began to weaken in May because of a global semiconductor chip shortage, despite the industry's traditional peak season at the end of the third quarter. The Covid-19 pandemic in India has weighed on demand for lithium-ion battery cells, which may also pressure LCO demand in China as China is a key exporter of lithium-ion battery cells to India, according to market participants. There are no signs that demand will rise significantly in September-October like in previous years.

Cobalt prices have rebounded this month after last month's downtrend on an expected shortage of feedstock supplies and low efficiency at South Africa's Durban port. Argus last assessed prices for 73pc grade tetroxide firm at 284-289 yuan/kg ($44-44.80/kg) ex-works on 3 September in line with higher chloride and sulphate feedstock costs. Tetroxide producers are poised to lift offer prices in the short run in response to rallying salts prices. Prices for 24pc grade chloride rose by Yn1,000/t from 31 August to Yn85,000-88,000/t ex-works on 3 September, with the range for 20pc grade sulphate assessed higher at Yn75,000-78,000/t ex-works from Yn74,000-77,000/t ex-works on 31 August.