China Cobalt (Metal/Salt/Powder) Industry and Top 12 Manufacturers’ in-depth Analysis (2017 to 2020)

The gloomy nickel price in past 5 years resulted in a poor production expanding desire for global major copper and nickel mining companies, which indirectly caused the passive reduction of cobalt ore. It is rarely to find existing main cobalt mines releasing plan of production expanding. In 2016, the global refine cobalt output declined 4.3%, or 4224 tons, on a YoY basis. The reduction mainly came from non-CDI members. In next 3 to 5 years, due to limited newly build cobalt ore and refine cobalt capacities, the shortage of refine cobalt would maintain around 10000 tons.

The growth of China’s cobalt consumption mainly drove by battery market, particularly the power battery. In 2001, battery consumed 30% of China’s total refine cobalt demand and soared to 76.6% in 2016 with a consumption of 35237 tons. It is estimated that by 2020 this figure will increase to 83%. The Chinese government has set up a 2 million sales target for electric cars by 2020, which will significantly stimulate the demand for cathode materials and further benefits refine cobalt demand.

2. Market price

At the beginning of 2017, the release of Auto Industry Long-term Development Plan and premium subsidies for NCM&NCA power batteries improved cobalt demand. Besides, the supply side tightened, pursuit from private hot money and hoarding of market makers have boosted the cobalt price in the first quarter of 2017. After April, the cobalt price fell back at a certain degree, including electrical cobalt and Co3O4. But taking the shortage of cobalt ore into consideration, the cobalt price will remain be strong for a relatively long term.

3. Technology trends

There are 3 mainstream Co3O4 manufacturing technologies in China:

1. cobalt chloride from ore-compounded cobalt oxalate-calcine to Co3O4 -crushing and grading. Typical enterprise: Jinchuan, Tengyuan Cobalt.

2. cobalt chloride or cobalt sulfate from ore-compounded cobalt carbonate-calcine to Co3O4 -crushing and grading. Typical enterprise: Huayou Cobalt.

3. cobalt sulfate from ore-calcine cobalt sulfate to Co3O4 -crushing and grading. Typical enterprise: Reshine.

From the perspective of manufacturing, the feature of China’s Co3O4 technology is directly started from cobalt ore and leave out metal cobalt. There are back-end processes like crushing and grading. The costs of this kind of technology is relatively lower but the content of impurities are unmanageable. Especially the iron impurities are obviously higher than Japanese peers.

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4. Competitive landscape

Most Chinese refine cobalt manufacturers are concentrated in cobalt salt products, only few of them have metal cobalt and cobalt powder products. Large parts of their capacities are Co3O4. Jinchuan and GEM are major metal cobalt manufacturers, Hanrui, Shanghai Bailuoda and Shenzhen GEM are major cobalt powder manufacturers.