Chinese buyers have been reluctant to commit to long-term contracts for cobalt raw materials for 2019 during this year's mating season, Fastmarkets has learned.
Year-long or multi-year commitments are traditional, but Chinese buyers now intend to purchase cobalt raw materials, including concentrates and hydroxide, on a spot basis, because there is adequate spot supply and because their profit margins are being squeezed.Chinese producers had been eager to secure cobalt raw materials in the past few years amid tight supply and rising cobalt prices. But they have taken a completely opposite position this year, after seeing the aggressive production ramp-up on the mining side."In the past two years, it was Chinese buyers who chased after miners to sign long-term contracts for raw materials. Now, it is miners who are pushing Chinese buyers - who have hesitated to commit to long-term contracts - to book units over a longer period," a consumer said.Last year, Glencore announced the restart of its Katanga mine in the Democratic Republic of Congo (DRC), with target output in 2018 of 11,000...