12th Rare Earth Summit
May 27-28, 2021
Hangzhou, Zhejiang, China
11th Aluminum Raw Materials Summit
May 20-21, 2021
Hangzhou, Zhejiang, China
9th Magnesium Summit
April 15-16, 2021
Hangzhou, Zhejiang, China
13th World InBiGeGa Forum
March 25-26, 2021
Hangzhou, Zhejiang, China
7th World Antimony Forum
June 13-14, 2019
Changsha, Hunan, China
7th Refractory & Abrasive Materials Summit 2019
May 23-24, 2019
Qingdao, Shandong, China
10th Aluminum Raw Materials Summit
May 16-17, 2019
Zhengzhou, Henan, China
11th Rare Earth Summit
May 9-10, 2019
Qingdao, Shandong, China
8th Magnesium Summit
April 11-12, 2019
Zhuhai, Guangdong, China
12th World InBiGeGa Forum
March 14-15, 2019
Zhuhai, Guangdong, China
6th World Manganese & Selenium Forum
May 21-22, 2018
Hainan Sanya, China
Interview with Han Difei, Marketing Manager of Ningbo Coboto Cobalt & Nickel Co., Ltd.
Ningbo Coboto Cobalt & Nickel Co., Ltd. is a high-tech enterprise specializing in R&D manufacture and sales of cobalt salts and nickel salts. The company was established in February 2004, covering 85 mu and 30,000 m2 of workshop space. It is located in Yuyao, Zhejiang, China. The leading product is cobalt tetroxide and the monthly production capacity is 800t. The company supplies cobalt tetroxide both at home and abroad.
Han Difei: Cobalt producers should join hands to tide over difficulties during off season
----Interview with Han Difei, Marketing Manager of Ningbo Coboto Cobalt & Nickel Co., Ltd.
Asian Metal: Thank you for accepting this interview! Many domestic cobalt salt producers have reduced their output significantly and some have even halted production as cobalt price continues decreasing, hitting the lowest level since the height of the financial crisis. Please share your views on the domestic cobalt market with us.
Han: Oversupply exists in the market, while at the same time demand increases slowly with large quantities of cobalt concentrate and intermediate products have been imported in recent years. Existing factories are expanding capacity to extend output and new ones are established every year. The cobalt market is likely to continue this trend in the rest of 2012 and even next year as high stocks cannot be digested fundamentally, despite a reduction of production in the current sluggish market.
Asian Metal: Coboto has developed rapidly with expanded production in the recent years. The output amounted to 2,000t and 3,300t in 2010 and 2011 respectively, accounting for almost 13% and 16% of the entire domestic production, according to statistics from Asian Metal.
Furthermore, Coboto expanded its production capacity to 800tpm at the end of 2011, being the largest producer of cobalt tetroxide in China. Therefore, how does your company ensures profitability in a tumultuous economic landscape and a weak cobalt market?
Han: We cannot claim to be the biggest cobalt tetroxide producer in China. Coboto mainly pursues stable growth to avoid risks brought by aimless expansion. The company depends on high quality and superior sales service to meet the demand of clients and offer clients with products of a high cost performance. Meanwhile, we develop one to two clients every year. Fixed procurements from strategic clients form the base output of our company.
To be honest, Coboto has been at a loss since last year despite rising output and scale effect. Except cobalt chloride, labor cost, electricity, water and auxiliary materials costs increase year by year. For instance, the wages of workers increases by about 10% every year and the industrial water price has risen by more than 50% compared with that of the same period of last year. However, the cobalt price keeps falling. Thus, the company has experienced loses. Despite current difficulties, we remain optimistic about the future outlook of the market.
Asian Metal: As the major export enterprise of cobalt tetroxide, Coboto exported 449t and 730t of cobalt tetroxide in 2010 and 2011 respectively, accounting for the total export of about 15% and 23%. As we know, South Korea, Japan and Europe rank as the top three Chinese cobalt tetroxide export markets. Would you please talk about the export of Chinese cobalt tetroxide?
Han: Cobalt tetroxide export keeps relatively stable in the past two years although exports have not risen as drastically as seen in the lithium cobalt oxide export because clients in South Korea prefer to buy lithium cobalt oxide directly, squeezing the market share of cobalt tetroxide. Most of our export cobalt tetroxide is sold to South Korea, which is due to strong demand from Samsung and LG with advanced lithium battery technology.
Asian Metal: Has the sluggish economy this year affected the export of cobalt tetroxide in your company? Please give your opinion on the export market.
Han: The export of our cobalt tetroxide increased slightly y-o-y as we have close strategic operations with stable downstream clients. The export growth for cobalt tetroxide has slowed down, while for lithium cobalt oxide is perfectly good, and the reason of which we have mentioned. Many cobalt tetroxide producers have focused on the export market due to intense competition on prices and difficulties in obtaining money from downstream users, but clients from Japan and South Korea have high requirement on the stability and technology of the product, which is a threshold to pass for many producers.
Asian Metal: Easpring, B&M and CITIC Guoan are all your clients. Please talk about the downstream market of lithium cobalt oxide in recent years.
Han: The overall demand for lithium cobalt oxide has been increasing all the time as low prices of cobalt hinder the replacement of lithium nickel cobalt manganese oxide and smartphone requires high performance of lithium batteries. Lithium nickel cobalt manganese oxide cannot take the place due to high technology of lithium cobalt oxide and high discharge plateau. Lithium cobalt oxide market has experienced great changes with no big increment of sales and no development of some LCO producers, while rapid increase in production of some producers, resulting in focused market share, especially for the export market where 3-4 enterprises control almost the whole export market. Most market share is controlled by several LCO enterprises although new ones are established in the industry every year.
Asian Metal: Global lithium battery continues being transformed to China, Japan and South Korea, especially for China. What’s your opinion on the lithium battery market?
Han: The domestic lithium battery market is flooded with producers with different advantages, among which large enterprises hold strong strength but small sized ones with less access to capital are delaying payment for suppliers, forming a bad conduction effect. Overseas lithium battery plants, with cost advantages, have put high pressure on domestic producers due to the tax rebate of Chinese lithium cobalt oxide and cobalt tetroxide.
Asian Metal: Traditional cell phone producers such as Nokia and Motorola are facing significant difficulties while Apple and Samsung perform well with the hot sale of smart phones. In this situation, will cobalt tetroxide demand be influenced on granularity? Does Coboto have plans to adjust or innovate its products?
Han: With the higher request for lithium battery in smartphone, not only cathode material needs to be upgraded, other materials like aluminum foil also need to be improve. Thinner aluminum foil is needed to coat more cathode materials. The granularity of cobalt tetroxide is becoming bigger, and it is required by some South Korean enterprises and some domestic cobalt tetroxide plants R&D products with bigger granularity.
Coboto is also doing research in this field which has awarded success and large particles products will be launched into the market in the near future. We aim to operate in the high-end market, so prices of the new product will be different from common cobalt tetroxide in order to avoid a price war.
Asian Metal: Most participants predict the market will be reshuffled due to excess cobalt supply. What do you think about this? Do you any suggestions how the industry could address this?
Han: This industry is sure to be reshuffled and develop well as some plants will quit in the situation of excess supply. Domestic enterprises do not have the pricing power as raw materials rely heavily on imports; domestic enterprises can only make thin profits from the conversion of cobalt concentrate to lithium cobalt oxide. In this situation, enterprises should come together to avoid a price war and to ensure they can all survive the current difficulties.
Asian Metal: Thank you again for accepting this interview and your long-term support of Asian Metal!
Han: Thank you!
Han: Oversupply exists in the market, while at the same time demand increases slowly with large quantities of cobalt concentrate and intermediate products have been imported in recent years. Existing factories are expanding capacity to extend output and new ones are established every year. The cobalt market is likely to continue this trend in the rest of 2012 and even next year as high stocks cannot be digested fundamentally, despite a reduction of production in the current sluggish market.
Asian Metal: Coboto has developed rapidly with expanded production in the recent years. The output amounted to 2,000t and 3,300t in 2010 and 2011 respectively, accounting for almost 13% and 16% of the entire domestic production, according to statistics from Asian Metal.
Furthermore, Coboto expanded its production capacity to 800tpm at the end of 2011, being the largest producer of cobalt tetroxide in China. Therefore, how does your company ensures profitability in a tumultuous economic landscape and a weak cobalt market?
Han: We cannot claim to be the biggest cobalt tetroxide producer in China. Coboto mainly pursues stable growth to avoid risks brought by aimless expansion. The company depends on high quality and superior sales service to meet the demand of clients and offer clients with products of a high cost performance. Meanwhile, we develop one to two clients every year. Fixed procurements from strategic clients form the base output of our company.
To be honest, Coboto has been at a loss since last year despite rising output and scale effect. Except cobalt chloride, labor cost, electricity, water and auxiliary materials costs increase year by year. For instance, the wages of workers increases by about 10% every year and the industrial water price has risen by more than 50% compared with that of the same period of last year. However, the cobalt price keeps falling. Thus, the company has experienced loses. Despite current difficulties, we remain optimistic about the future outlook of the market.
Asian Metal: As the major export enterprise of cobalt tetroxide, Coboto exported 449t and 730t of cobalt tetroxide in 2010 and 2011 respectively, accounting for the total export of about 15% and 23%. As we know, South Korea, Japan and Europe rank as the top three Chinese cobalt tetroxide export markets. Would you please talk about the export of Chinese cobalt tetroxide?
Han: Cobalt tetroxide export keeps relatively stable in the past two years although exports have not risen as drastically as seen in the lithium cobalt oxide export because clients in South Korea prefer to buy lithium cobalt oxide directly, squeezing the market share of cobalt tetroxide. Most of our export cobalt tetroxide is sold to South Korea, which is due to strong demand from Samsung and LG with advanced lithium battery technology.
Asian Metal: Has the sluggish economy this year affected the export of cobalt tetroxide in your company? Please give your opinion on the export market.
Han: The export of our cobalt tetroxide increased slightly y-o-y as we have close strategic operations with stable downstream clients. The export growth for cobalt tetroxide has slowed down, while for lithium cobalt oxide is perfectly good, and the reason of which we have mentioned. Many cobalt tetroxide producers have focused on the export market due to intense competition on prices and difficulties in obtaining money from downstream users, but clients from Japan and South Korea have high requirement on the stability and technology of the product, which is a threshold to pass for many producers.
Asian Metal: Easpring, B&M and CITIC Guoan are all your clients. Please talk about the downstream market of lithium cobalt oxide in recent years.
Han: The overall demand for lithium cobalt oxide has been increasing all the time as low prices of cobalt hinder the replacement of lithium nickel cobalt manganese oxide and smartphone requires high performance of lithium batteries. Lithium nickel cobalt manganese oxide cannot take the place due to high technology of lithium cobalt oxide and high discharge plateau. Lithium cobalt oxide market has experienced great changes with no big increment of sales and no development of some LCO producers, while rapid increase in production of some producers, resulting in focused market share, especially for the export market where 3-4 enterprises control almost the whole export market. Most market share is controlled by several LCO enterprises although new ones are established in the industry every year.
Asian Metal: Global lithium battery continues being transformed to China, Japan and South Korea, especially for China. What’s your opinion on the lithium battery market?
Han: The domestic lithium battery market is flooded with producers with different advantages, among which large enterprises hold strong strength but small sized ones with less access to capital are delaying payment for suppliers, forming a bad conduction effect. Overseas lithium battery plants, with cost advantages, have put high pressure on domestic producers due to the tax rebate of Chinese lithium cobalt oxide and cobalt tetroxide.
Asian Metal: Traditional cell phone producers such as Nokia and Motorola are facing significant difficulties while Apple and Samsung perform well with the hot sale of smart phones. In this situation, will cobalt tetroxide demand be influenced on granularity? Does Coboto have plans to adjust or innovate its products?
Han: With the higher request for lithium battery in smartphone, not only cathode material needs to be upgraded, other materials like aluminum foil also need to be improve. Thinner aluminum foil is needed to coat more cathode materials. The granularity of cobalt tetroxide is becoming bigger, and it is required by some South Korean enterprises and some domestic cobalt tetroxide plants R&D products with bigger granularity.
Coboto is also doing research in this field which has awarded success and large particles products will be launched into the market in the near future. We aim to operate in the high-end market, so prices of the new product will be different from common cobalt tetroxide in order to avoid a price war.
Asian Metal: Most participants predict the market will be reshuffled due to excess cobalt supply. What do you think about this? Do you any suggestions how the industry could address this?
Han: This industry is sure to be reshuffled and develop well as some plants will quit in the situation of excess supply. Domestic enterprises do not have the pricing power as raw materials rely heavily on imports; domestic enterprises can only make thin profits from the conversion of cobalt concentrate to lithium cobalt oxide. In this situation, enterprises should come together to avoid a price war and to ensure they can all survive the current difficulties.
Asian Metal: Thank you again for accepting this interview and your long-term support of Asian Metal!
Han: Thank you!