Cobalt price hits 3-year high as transport issues dog DRC
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The cobalt sulphate price surged to a three-year high in China on February 16, supported by increasing downstream demand and tight upstream cobalt hydroxide supply, Fastmarkets reports.
Cobalt hydroxide is a feedstock material generally produced at mine site as part of the primary processing of cobalt ores.
Cobalt sulphate is a refined cobalt product which typically contains >20.5% cobalt. It is used for several end markets but will most commonly enter the lithium-ion battery supply chain.
“Downstream buyers booked large volumes of cobalt sulphate ahead of China’s Lunar New Year, and restocking continues this week as some buyers are fearing further increases, considering higher production costs,” a producer told Fastmarkets.
“Some small-sized producers have basically no availability for cobalt sulphate, and other bigger producers insist on higher prices above 110,000 yuan ($US17,384) per tonne,” a buyer said.
“I heard there are even offers at 115,000 yuan ($US18,174) per tonne for cobalt sulphate, but I currently haven’t heard real deals at such a high level.”
The landlocked DRC is a global giant when it comes to production of the key battery metal.
The DRC produced 120,000 tonnes of cobalt in 2021, accounting for +70% of global output.
It’s where China – the world’s biggest consumer by far — gets ~90% of its supply.
But these cobalt shipments have been interrupted, exacerbating an already stressed supply situation.
A fall in China’s cobalt imports in July 2021 due to ongoing issues at Durban port in South Africa — a key export channel for Democratic Republic of Congo (DRC) supply – has intensified in 2022.
Under normal conditions, land delivery by truck from DRC to the Durban port in South Africa usually took less than 20 days, market sources told Fastmarkets.
But now deliveries are taking 30 days or more. A scarcity of containers and delayed shipments have made the whole process even longer, they said.
“I don’t think the logistics issues from South Africa to China will ease in the first quarter or even the first half of 2022,” a cobalt hydroxide supplier said.