In February, China's cobalt sulfate production was 18,480 tonnes, a decrease of 7.48% MoM and 11.62% YoY. The pressure on the supply side mainly stemmed from the slow resumption of production at smelters after the CNY holiday. Some small and medium-sized enterprises chose to extend equipment maintenance periods or delay production increase plans due to previous losses and tight cash flow. Additionally, high raw material costs and weak demand led to insufficient production willingness among enterprises. In late February, disruptions in overseas raw material supply continued, and the uncertainty of export policies in the Democratic Republic of Congo exacerbated cautious production scheduling by smelters. It is worth noting that despite the rising market sentiment to hold prices at the end of the month, the actual capacity release was still constrained by the demand from downstream ternary precursor enterprises.
China's cobalt sulfate production is expected to be 20,000 tonnes in March, an increase of 8.23% MoM but a decrease of 11.94% YoY. The monthly output increase is mainly due to the gradual recovery of smelters' production after the holiday and the recovery of demand in the electric vehicle industry chain. However, the yearly decline indicates that the market is still under pressure, and raw material prices may dampen the enthusiasm of small and medium-sized factories to resume production. The penetration rate of the "de-cobaltization" technology route in ternary precursor enterprises continues to rise, suppressing the demand of cobalt sulfate. The current market focus is on the balance between raw material cost transmission and downstream lower price procurement. Subsequent attention should be paid to the impact of changes in African cobalt ore export policies on the pace of production resumption.
Edited by Cassie Li, lixiangying@mysteel.com
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