CLA - Cobalt related news, page-2693

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Shares in China’s largest cobalt refiner Huayou Cobalt fell 10 per cent on Monday after the company said a collapse in cobalt prices had almost wiped out its first-quarter profit.Huayou Cobalt, a supplier of the material used in electric car batteries, said net profit fell to Rmb12.4m ($1.8m) in the first three months, from Rmb851m a year earlier.The stumble underscores the threat to refiners, which process the metal into a form usable by battery makers. Last week, shares in Belgium-based cobalt refiner Umicore also fell by the most on record after it said it expected earnings in 2019 to be about 10 per cent lower than analysts had anticipated.The price of cobalt, a key metal for lithium-ion batteries, has fallen more than 60 per cent over the past year, due mostly to an increase in supply from mines in the Democratic Republic of Congo.Shanghai-listed Huayou is one of the largest buyers of cobalt in the DRC, where it owns a mining and processing company. It has also expanded into producing battery materials, and last year signed a joint venture with Korean battery maker LG Chem to build two plants in China.China’s plans to reduce generous subsidies for its electric car makers have also dented prices; Beijing plans to phase out subsidies for battery-powered cars completely by 2021.Cobalt prices surged in 2017 due to growing sales of electric cars, hitting a 10-year peak of more than $40 a pound in April 2018, before crashing to trade at $13 a pound in March this year. Cobalt is now trading at about $16.70 a pound, according to Fastmarkets.The dramatic rise in prices in 2017 was driven in part by stockpiling in China, according to traders. This year, much of that inventory has come on to the market, pushing down prices. Meanwhile, the start of a new mining project in the DRC by Kazahkstan’s ERG has also boosted supply.This month, too, Glencore said it had resumed shipments of cobalt from its giant Kamoto mine in the DRC. The Swiss miner and commodity trader was forced to halt sales late last year after discovering traces of uranium in cobalt.Despite the increased production, executives at Huayou argue that the modest rebound in cobalt prices this month will continue. A price of about $20 to $25 a pound is reasonable, agreed analysts at JPMorgan, in a recent note. Last week Canada-listed cobalt producer Sherritt also said cobalt prices have found a bottom and were likely to rise through the rest of 2019.“We’re seeing there’s a bit more uptick in demand,” said David Pathe, Sherritt’s chief executive. “There’s been a little upward pressure on the price this month, and there are people out buying cobalt.”