Chinese diversified metals producer China Molybdenum (CMOC) recorded a fall in its cobalt production in 2020 following the impact of the Covid-19 pandemic, despite a rise in sales.
CMOC, also known as Luoyang Luanchuan Molybdenum, produced 15,436t metal equivalent of cobalt in 2020, down by 4.11pc from 16,098t in 2019, The output was from its Tenke Fungurume copper-cobalt mine in the Democratic Republic of Congo (DRC).
Cobalt demand lingered at low levels in the first half of 2020 because of a “low-cobalt” trend in the power battery industry. A recovery in the overseas new energy vehicles (NEV) market and a shift in orders from the traditional consumer electronics sector bolstered demand for cobalt salts in the second half of the year.
COMC’s cobalt sales in 2020 rose by 14.56pc from a year earlier to 17,333t, with inventories increasing by 220.82pc to 11,645t.
The firm in last December acquired a 95pc share of the Kisanfu copper-cobalt mine in the DRC.
CMOC in February raised its cobalt production guidance to 16,500-20,100t of metal equivalent for 2021, up from 14,000-17,000t in 2020.
The global cobalt market is expected to maintain a balance in 2021 following a recovery in supplies and demand, CMOC said. Output from new production and expansion projects will be rolled out gradually, while the impact on logistics services from the pandemic may re-emerge.
An expected growth in the European NEV market driven by the continent’s rigorous carbon emission targets and North America’s increasing emphasis on developing clean energy is expected to boost cobalt demand outside of China, according to CMOC.
The Chinese market is facing a short-term market share expansion of lithium-iron phosphate batteries, which will help accelerate the country’s vehicle electrification. But it is still a long-term development path for EVs to use nickel-cobalt-manganese ternary batteries with higher energy density. The prospect of China’s energy storage market is promising in the 14th five-year plan for 2021-25, while the consumer electronics sector will benefit from the rolling out of 5G base stations and the expansion of new consumer electronic products, according to COMC, expecting cobalt prices to rise in the medium and long term.
Argus last assessed cobalt hydroxide prices lower at $22.70-24.10/lb cif China yesterday, down by 10pc on either side of the range, as the supply outlook in Africa implies an end to tightness towards the second half of the year. But market participants said that further disruption could cause prices to rise because of the current volatility.
The firm produced 13,780t metal equivalent of molybdenum in 2020, down by 7.63pc from 14,918t in 2019, also affected by the impact of the Covid-19 pandemic.
