Viewpoint: Cobalt feedstock to stay in surplus globally
Cobalt feedstock will likely remain in oversupply this year as some major mining firms with operations in the Democratic Republic of Congo (DRC) and Indonesia continue to expand output capacities.
The feedstock surplus comes as use of lithium-iron-phosphate (LFP) has surpassed ternary cathode active material (CAM) applications in the electric vehicle (EV) battery sector. LFP batteries do not require cobalt.
Intermittent price upswings for copper and nickel — from which cobalt is produced as a byproduct — have led to cobalt capacity expansions since 2021 among some major mining firms in the DRC and Indonesia, the world's main production hubs for cobalt feedstock.
Argus estimates that global supply of cobalt will increase by 13pc from 2023 to 245,000t of metal equivalent this year.
The increment is to largely come from expansions at the KFM and Kinsevere copper-cobalt mines in the DRC owned by Chinese diversified metal producer CMOC and mining company MMG respectively, as well as Chinese battery metal firms Huayou Cobalt's Huafei, GEM's QMB and Ningbo Lygend's mixed nickel-cobalt hydroxide precipitate (MHP) projects in Indonesia.
Others that are being developed include Chinese metals producer Jinchuan's Musonoi copper-cobalt project in the DRC; DRC's mining firm Chemaf's Mutoshi copper-cobalt mine; and Indonesian MHP projects invested in by Chinese battery CAM producers GEM, Huayou, Brazilian mining firm Vale and US automaker Ford. These facilities are expected to gradually come on stream by the end of 2024 or in the next few years.
LFP outweighs ternary CAM
LFP batteries have maintained a cost advantage over ternary batteries following Beijing's cut to and subsequently removal of purchase subsidies for new energy vehicles (NEVs), as well as deeper declines in lithium prices in China throughout 2023 compared with cobalt prices.
Argus-assessed prices for 99.5pc grade lithium carbonate averaged 258,806 yuan/t ($36,000/t) ex-works in 2023, down by around 54pc from 2022, while Argus-assessed prices for 20.5pc grade sulphate averaged Yn38,469/t ex-works in 2023, down by around 53pc on the year.
Installed volume of LFP power batteries in China exceeded that of nickel-cobalt-aluminium/nickel-cobalt-manganese NCA/NCM ternary batteries for the first time in July 2021 since the start of 2019, when NCM/NCA batteries had a higher market share. LFP power batteries have since gained a stronger position in the Chinese market following the central government's decision to curtail purchase subsidies for NEVs during 2021-22 and abolish the policy in early 2023.
Demand for LFP CAM surpassed that of ternary CAM in China in 2021 and in the global market in 2022 respectively. Demand for LFP CAM was about 50pc more than for ternary CAM in 2023, Argus estimates.
Multiple automakers outside China have begun using LFP cells or are considering using them to lower their EV manufacturing costs. US-based Tesla has switched all of its standard-range vehicles to LFP batteries since the end of 2021. US EV maker Rivian likewise plans to transition its standard battery packs to LFP. South Korea's Hyundai in March 2022 unveiled a plan to ramp up its use of LFP batteries. European carmakers and battery producers have also taken steps towards using new battery chemistries, which has quickly built out new supply architecture for LFP and sodium-ion batteries in recent years. And Chinese battery producer Gotion started supplying LFP batteries to Volkswagen (China) in 2022, with plans to ship LFP batteries to Volkswagen outside China in the future.
Market participants expect LFP to continue to dominate the power battery CAM market globally in 2024. Argus estimates that global LFP output will reach 1.9mn-2mn t this year, up by 30pc from 2023 and far above the 1.1mn t of NCM output forecast for 2024, up by 10pc on the year.
Demand for cobalt-containing ternary CAM is expected to rise at a slower pace than for LFP, market participants said, meaning cobalt demand growth should continue to lag behind the rise in cobalt supplies.
Global cobalt demand will rise by 8.7pc from 2023 to 215,000t of metal equivalent this year, Argus predicts, but this may exacerbate the cobalt surplus given an estimated supply rise of 13pc over the same period.
Related news posts
Fortescue hold firms on 2024-25 iron ore target
Fortescue hold firms on 2024-25 iron ore target
Beijing, 30 August (Argus) — Australian iron ore producer Fortescue has reiterated its iron ore shipment target for the 2024-25 fiscal year ending 30 June of 190mn-200mn t, including 5mn-9mn t from its Iron Bridge project on a 100pc basis. The Iron Bridge magnetite project in Western Australia shipped its first cargo in July last year, with Fortescue's iron ore shipments totalling 191.6mn t for the full year . It had targeted to ship 192mn-197mn t for 2023-24. The company achieved a hematite average revenue of $103/dry metric tonne (dmt), up by 9pc on a year earlier. Hematite C1 costs for 2023-24 rose by 4pc from the previous year to $18.24/wet metric tonne (wmt) because of higher labour rates and mine plan driven cost escalation, although Fortescue said its cost control measures offset the partial increase. It forecasts hematite C1 costs for 2024-25 to rise to $18.50-19.75/wmt. The Argus ICX seaborne iron ore fines assessment for 62pc Fe cfr Qingdao averaged $119.40/dmt for 2023-24. Fortescue is on track to achieve real zero, or no fossil fuels and no offsets, for its scope 1 and 2 terrestrial emissions across its Australian iron ore operations by 2030. It is aiming to achieve this with building a new solar farm, deployment of electric excavators and the use of battery electric and hydrogen fuel cell haul truck prototypes. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US OCTG, line pipe imports fall in July
US OCTG, line pipe imports fall in July
Houston, 29 August (Argus) — Preliminary data from the US Department of Commerce shows that imports of oil country tubular goods (OCTG) and line pipe products fell in July. OCTG volumes fell by 88,100 metric tonnes (t) from the prior year, as volumes from Japan dropped by 15,500t, South Korea and Thailand both dropped by 13,500t, and volumes from Vietnam and Mexico fell by 11,300t and 9,300t, respectively. Volumes of line pipe less than or equal to 16in fell by 12,300t, as Italian volumes dropped by 4,500t, Ukraine dropped to zero from 4,400t in the prior year, and Brazilian volumes fell by 3,100t. Standard pipe imports increased by 13,400t on a 7,900t increase from Turkey. Heavy structural shape volumes jumped by 39,700t as Spanish volumes increased by 21,700t from the prior year, and imports from Germany rose by 9,200t. By Rye Druzchetta US pipe and tube imports metric tonnes Product Jul-24 Jul-23 Volume change ±% Jun-24 OCTG 95,792 183,909 -88,117 -47.9% 126,760 Line pipe 69,387 80,875 -11,488 -14.2% 87,976 Standard 66,100 52,716 13,384 25.4% 76,317 Heavy Structural Shapes 107,979 68,253 39,726 58.2% 54,096 US Department of Commerce July 2024 data is preliminary data, which is subject to change. Line pipe is all diameters. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Higher flats volumes lead US steel imports up
Higher flats volumes lead US steel imports up
Houston, 29 August (Argus) — Higher volumes of flat steel imports led overall US steel imports higher in July. Total US steel imports for consumption were 2.2mn metric tonnes (t) in July, according to preliminary data from the US Department of Commerce. Hot-rolled coil (HRC) imports rose by 22,600t from the prior year, driven by a 32,900t jump in Japanese volumes, which were offset slightly by a 9,200t drop from Canada. Cold-rolled coil (CRC) volumes were up by 37,000t in July, with Canada exporting 8,800t more than the prior year. Hot-dipped galvanized (HDG) coil imports from Brazil jumped by 17,200t from the prior year, while volumes from Mexico rose by 13,000t. Volumes of blooms, billets and slabs dropped by 121,900t, as Mexico's volumes dropped to zero from 95,800t in the prior year. By Rye Druzchetta US steel imports metric tonnes Product Jul-24 Jul-23 Volume change ±% Jun-24 HRC 156,952 134,326 22,626 16.8% 156,861 CRC 172,746 135,778 36,968 27.2% 113,400 HDG 233,511 165,607 67,904 41.0% 238,809 Blooms, billets, slabs 364,138 486,053 -121,915 -25.1% 395,478 Total (all items)* 2,197,347 2,153,126 44,221 2.1% 1,955,800 US Department of Commerce July 2024 data is preliminary data, which is subject to change. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
ThyssenKrupp Steel executives leave as tensions rise
ThyssenKrupp Steel executives leave as tensions rise
London, 29 August (Argus) — Seven board and supervisory board members of ThyssenKrupp Steel Europe have left their positions given deepening strife with the chief executive of parent company ThyssenKrupp. There has been an ongoing dispute between ThyssenKrupp chief executive Miguel Lopez and board members of ThyssenKrupp Steel Europe, including the latter's chief executive Bernhard Osburg, for some months now over the future of the business. Osburg and two other board members from Steel Europe have now stepped down, as has the chairman of the Steel Europe supervisory board Sigmar Gabriel and three other supervisory board members. The members have "lost all confidence in the will and ability of the chairman of the executive board of ThyssenKrupp AG to co-operate appropriately", Gabriel said in a note after a meeting today. He said Lopez has carried out an "unprecedented" and public campaign against the executive board of Steel Europe, damaging its ability to act and breaching trust. The Steel Europe board had proposed a plan to align the business' production to its recent shipments, meaning a decline from about 12mn t/yr to 9mn t/yr, and to exit from steelmaker HKM's joint venture with Salzgitter and Vallourec. HKM is viewed as a high-cost slab producer. However, Lopez felt the plans did not go far enough to restructure the business, calling for a deeper reorganisation and reduction in headcount. A spokesperson for union IG Metall said it "strongly" supports Osburg and the outgoing chairman, and criticises the actions of Lopez. The union is not legally allowed to call for strike action, but has called for protests over the departures. One executive said the dispute could threaten the future of Steel Europe as an entity. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more