Two recent @Fastmarkets articles explain an interesting dynamic unfolding in the Chinese #cobalt market:
Cobalt sulphate price has hit a 3-year high driven in part by strong downstream demand, but particularly by tightness in supply of the upstream feedstock, cobalt hydroxide, due to logistics issues getting material from the #DRC out via #SouthAfrica: dashboard.fastmarkets.com/launch?url=/a/…
Market participants are not anticipating the problems to be resolved in the near term: “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.
2nd piece highlights knock-on impact these issues are having on cobalt metal prices in China. Better margins for producing cobalt sulphate as opposed to metal has incentivized more focus on the former, causing a nationwide reduction in metal production: dashboard.fastmarkets.com/launch?url=/a/…
Based on current spot inventories, replacement and consumption rates, spot market inventories may only last for about a month without additional supplies becoming available.
Co metal consumers are now looking to alternatives such as scrap or salts, but a trader describes this as “just a quick fix and not a long-term solution” adding that “the only hope is for Co metal prices to rise so much that producers are attracted to ramping up metal production"
• • •
Missing some Tweet in this thread? You can try to
force a refresh
