Support Unit
Cobalt: With previous golden years difficult to re-enact and achieve, is the current appearance of price bottom-out leading to rebound?
The dynamics of the cobalt market have somewhat mirrored the dynamics of the broad market, and combined with increased output, the cobalt metal 99.3%min price has fallen from USD48.5-49.5/lb in 2008 to USD10.5-11.0/lb in Q4 2012. Many producers in China and India, in order to minimize losses, have constricted business activity in the run up to the end of the year. Additionally, the cobalt sector continues to undergo consolidation with Shenzhen Gelinmei High-Tech Co., Ltd. (GEM) intending to acquire 51% of shares in Jiangsu Cobalt Nickel Metal Co., Ltd (KLK) and there are suggestions that Ohio-based specialty chemicals provider, OMG, is in negotiations to sell its stake in the Big Hill cobalt smelter in the Democratic Republic of Congo (DRC), as well as a refinery in Finland, with Glencore a likely candidate to buy OMG’s stake in the Big Hill project and Freeport McMoRan reported to be negotiating the purchase of the Kokkola refinery in Finland.
In Q4 2012, the much anticipated Madagascan Ambatovy cobalt and nickel mine commenced production and signed an agreement with Darton Commodities to market the finished product in Europe and India, and Phoenixx International Resources to market and distribute the product in the US. The announcement sent a shockwave throughout the market resulting in a downward trend seen throughout the quarter. On demand, there continues to be a lack of new applications in the cobalt market. Demand in the lithium battery and super alloy industries keep firm. However, cemented carbide and the magnet industries have been at the mercy of the uncertainty that continues to cast a dark cloud over the market. In the last few years demand for portable rechargeable electronic device has grown rapidly however, the emerging use of cobalt in rechargeable batteries for electric vehicles has not seen the anticipated growth, but still remains a potentially significant area of growth for the cobalt market.
The U.S.A and China, the two engines of the global economy, have both elected new leaders in late 2012. With the elections now having passed, what will be the impact on the economy? Will the cobalt market bottom out in 2013 and will it rebound during 2014-2015?
Lithium: New energy power: thought, and cooperation after consolidation
The lithium industry has fluctuated significantly in recent years as the market trends toward integration; a final agreement between Talison Lithium Co. and Rockwood Holdings Inc. was settled in August which would have had Rockwood purchase Talison for CAD724 million in cash. However, this agreement was subsequently rejected by Talison on December 12, 2012. Instead, Chengdu Tianqi Industrial Group will win the takeover with a CAD874 million bid. Talison expects approval of the transaction to be put to a vote in late February, 2013.
Meanwhile, Jiangxi Ganfeng Lithium Company is searching for resources, Luxiang Co., Ltd. acquired the final 49% of shares of Ganzizhou Rongda Lithium Company and, after asset restructuring, won Ganzi methyl mine #134, which is the largest spodumene mine in Asia. This is the magic of the lithium industry that keeps resource-holders optimistic about getting the right price and insiders hopeful of the development of the electric vehicle market.
The two giants in the global lithium market, Rockwood and FMC, raised prices in 2011 and 2012. Will the price of lithium continue to increase significantly in 2013? What changes will be seen in the lithium industry? Where will the lithium market go in the long term?
Elites in the lithium industry will gather at the World Cobalt and Lithium Forum, 2013, hosted by Asian Metal, to discuss the ongoing development of these markets.
As a leader in international metal information, Asian Metal will provide a platform for attendees to communicate with major participants in these industries. We look forward to your participation.