(Bloomberg) Europe’s benchmark price for cobalt has fallen by more than 13%, while declines in China have been higher amid deteriorating demand.
Shanghai, which was hit by lockdowns, is one where demand for cobalt is low after registering zero car sales in April. Refiners have been exposed to losses due to costly imported raw materials.
Ying Lu, an analyst at Wood Mackenzie Ltd, says the cobalt market is witnessing buyers and sellers working on revising their pricing terms. Miners are forced to grant substantial price concessions to keep cobalt flowing into the Chinese market.
The falling prices come amid signs of demand recovery for China’s EV market. Sales of EVs topped estimates in May.
The demand for cobalt in other sectors, including the airplane industry, is also expected to rise in the next six months as travel restrictions ease.
Analysts are less optimistic about cobalt price recovery anytime soon. Susan Zou, a senior analyst at Rystad Energy, says that demand for cobalt from consumer electronics remains uncertain.
A further price recovery headache is indicated by strained discussions between cobalt miners and refiners amid widening gaps between the pricing of the metal in China versus the global markets.
Wood Mackenzie’s Ying Lu says that Chinese cobalt buyers will need to realign the European price with conditions in the domestic market. The situation indicates a further decline in cobalt prices.
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