A sharp increase in China's cobalt metal imports last year was a consequence of refineries' efforts to hedge against tightening upstream supply, and trader moves to lock in profits during times of a favorable import arbitrage, market participants told Fastmarkets.
And these participants expect imports to remain elevated in 2021.
A total of 6,192 tonnes of cobalt metal was shipped to China over the course of 2020, an increase of 282% from 1,623 tonnes in the preceding year, the latest Chinese customs data shows.
The two most notable rounds of intensive purchasing of imported cobalt in China during 2020 occurred in June-July and August-September, with buying interest during the former period derived from optimism brought about by the country's
State Reserve Bureau stockpiling the metal and interest during the latter period driven by
attractive arbitrage opportunities.
China's cobalt metal imports hit 1,130 tonnes and 1,199 tonnes respectively in August and October last year, the highest and second-highest monthly import totals on record.
In addition, since late last year, an increasing number of cobalt refineries in China have attempted to build their metal exposure to...