SHANGHAI, Dec. 31 (SMM) -- This week, prices of refined cobalt and other cobalt products all climbed slightly, with lithium as an exception, but transactions were mainly from speculative buying. Prices of refined cobalt from Jinchuan Group were already above RMB 375,000/mt; mainstream traded prices of cobalt chloride were in the RMB 73,000-74,000/mt range; and mainstream traded prices of tricobalt tetroxide were at RMB 235,000/mt.
Market trading sentiment was moderate, and there were many speculative buying in the refined cobalt market. Transactions of cobalt salt and tricobalt tetroxide were also mainly from speculative buying besides some consumption demand. Reasons behind the rising prices are mainly from the expectation that cobalt will be traded on LME as well as the expectation of inflation. Recently, market rumored that future supply of cobalt ore will be negative affected as Congo government may readjust export policies. However, under the condition of supply surplus, any news from producing regions which may affect the supply and demand of cobalt market shall not exert any impact on cobalt market at present.
"Cottage cell phone" market (the same appearance as major brand cell phone but with inferior quality) was depressed by the joint efforts of major brand producers and some domestic major brand cell phones were sent to consumers as complementary gifts. Downstream demand of lithium battery reduced by 20% YoY and inventoried increased as well. In this context, battery producers didn't work at full capacities in December as previous years. Demand of lithium was still sluggish.
Supply still exceeds demand. SMM believes any rising price room for cobalt products will be limited. When enters into the first week of 2010, market fundamentals will remain the same without any change, and market may remain stable and rising price room for cobalt products will be limited. Prices of refined cobalt from Jinchuan Group will be at RMB 375,000/mt; mainstream traded prices of cobalt chloride will be in the RMB 73,000-75,000/mt range; and prices of tricobalt tetroxide will stay at RMB 235,000/mt; prices of lithium oxide will be move in the RMB 240,000-245,000/mt range.
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