Exclusive-China state stockpiler aims to buy up to 15,000 T of cobalt, sources say

exclusive-china state stockpiler aims to buy up to 15,000 t of cobalt, sources say

FILE PHOTO: Chinese flag is seen in this illustration taken, April 24, 2024. REUTERS/Dado Ruvic/Illustratio

By Pratima Desai

LONDON (Reuters) - China plans to buy up to 15,000 metric tons of cobalt metal from local Chinese producers over the next few months for domestic stockpiles, three sources familiar with the matter told Reuters, adding that it would be a record amount for a single purchase.

The planned purchase would be a big increase as industry sources say China's state stockpiler - the National Food and Strategic Reserves Administration - bought 8,700 tons of cobalt metal last year.

China dominates the processing of cobalt, most of it from the Democratic Republic of Congo (DRC), where it is a byproduct of copper output. In metal form it is used in the defence and aerospace industries and also in magnets for communication.

Cobalt metal purchases by the National Food and Strategic Reserves Administration could offset some of the surplus in the market this year.

"It could be as much as 15,000 tons that would be the most I remember in one tender," one of the sources familiar with the matter said.

The National Food and Strategic Reserves Administration did not respond to requests for comment.

Two of the sources said some of the cobalt bought by the National Food and Strategic Reserves Administration could be for military equipment.

A second source familiar with the matter said no agreement had yet been reached between China's state stockpiler and local producers.

"They (China stockpiler) have asked Chinese producers for numbers on availability and price. They will negotiate until they come to an agreement."

The third source said a ballpark price producers were looking for was 205 yuan or around $12 a lb, close to current cobalt prices which are near five-year lows.

Industry sources say China's plans to acquire 15,000 tons of cobalt would narrow the surplus in the market this year to around 20,000 tons. That compares with surpluses of around 11,000 and 16,000 tons in 2022 and 2023 respectively and excludes the amounts China bought for its stockpiles in those years, based on research by Macquarie analysts.

"It will take some pressure off cobalt prices, but it won't make much difference to an oversupplied market, given the amounts coming out of Congo," one industry source said.

According to Darton Commodities, Congo supplies last year amounted to 77% of the global total at more 170,000 tons.

Ramping up production in Congo is China's CMOC. Its Tenke Fungurume Mining site in Congo produced more than 55,500 tons of cobalt last year and 25,200 tons in the first quarter of 2024.

Chinese cobalt producers have seemed unfazed by oversupply and plummeting prices, with some said to benefit from state support for a sector seen as vital to China's electric vehicle industry and the energy transition.

(Reporting by Pratima Desai; editing by Veronica Brown and Jane Merriman)

OTHER NEWS

4 hrs ago

Palestine: Drone Footage of a Booby-Trapped Tunnel Shaft Inside a Residential Building in Rafah

4 hrs ago

450+ baddie playlist names that inspire are confident and empowering

4 hrs ago

Here's How Imitation Crab Really Gets Its Pink Color

5 hrs ago

School of baby snakehead fish appear at riverbank in China

5 hrs ago

Celtics' Kristaps Porzingis to have surgery, miss Olympics

5 hrs ago

European shares fall as Airbus hammers aerospace shares, tech slips

5 hrs ago

Stocks mostly rise with Nvidia; dollar inches up vs yen

5 hrs ago

TWFG Insurance makes US IPO filing public

5 hrs ago

Protestors Gain Entry Into Parliament, Eat Buffet From Restaurant

5 hrs ago

European Investment Bank steps up multi-billion euro defence investments

5 hrs ago

Analysis-Engine maker's Boeing dilemma seen weighing on Airbus output revision

5 hrs ago

Lithuanian conscription: fortifying NATO's flank?

5 hrs ago

Exclusive-Doordash held talks with UK's Deliveroo on takeover, sources say

5 hrs ago

Will MicroStrategy Be a Trillion-Dollar Stock by 2030?

5 hrs ago

#CHIVIDO2024: Stars align as Davido, Chioma tie the Knot

5 hrs ago

Tinubu’s student loan, coastal highway project were my ideas – Sowore

5 hrs ago

Watch me run across the narrowest 3-country salient in the world (First person to EVER document)

5 hrs ago

President Ruto expected to address the nation at 9pm

5 hrs ago

Obi preaches reconciliation as NLC disrupts Abure’s NWC meeting

5 hrs ago

New Attenborough portrait by Jonathan Yeo unveiled

6 hrs ago

Fed's Cook: 'At some point' it will be time to cut interest rates

6 hrs ago

Njeri Maina, Kirinyaga Woman Rep, Criticizes Pressure to Back Finance Bill

6 hrs ago

FTSE 100 slides as investors wary ahead of data and election

6 hrs ago

Nike set for weak quarterly sales growth as On, Hoka chip away market share

6 hrs ago

Nasdaq, S&P 500 open higher as Nvidia firms after selloff

6 hrs ago

Transfer: Cesc Fabregas to sign Chelsea player for Como

6 hrs ago

VIDEO: Hamas Chief Ismail Haniyeh's Family Killed By Israeli Warplanes In a Dramatic Gaza Blitz

6 hrs ago

Crazy Town singer Shifty Shellshock dies aged 49

6 hrs ago

EPL: Details of Ten Hag’s new Man Utd contract emerge

6 hrs ago

Central banks must prepare for profound impact of AI, BIS says

6 hrs ago

China urges EU to revoke sanctions on Chinese firms over Russian links

6 hrs ago

Ogier withdraws from WRC Rally Poland after reconnaissance crash

7 hrs ago

ECB could take action against firms in bond portfolio in climate fight

7 hrs ago

Mark Cuban: Why Curiosity Makes You More Money

7 hrs ago

Sri Lanka likely to sign bilateral debt agreements on Wednesday, foreign minister says

7 hrs ago

Don’t use Nnamdi Kanu’s detention for economic gain – Deputy Speaker, Kalu warns

7 hrs ago

Eleventh-hour push for deal on ‘radical’ GMO deregulation

7 hrs ago

Carbon price for homes and cars could prove ‘very controversial’, senior EU official admits

7 hrs ago

Mining giant Rio Tinto promises "radical transparency" in Serbia

7 hrs ago

Don't sign Finance Bill to law - Catholic Bishops tell Ruto