Glencore Declares Force Majeure on Cobalt Shipments
April 20 2022 - 1:50PM
Dow Jones News
By Yusuf Khan
Diversified mining company Glencore PLC declared force majeure
on its shipments of cobalt hydroxide with heavy flooding in Durban
halting exports from the South African port.
Glencore, which is the world's largest producer of cobalt
hydroxide--the chemical which is then processed to be used in
batteries and other metallurgical goods--suspended its cobalt
operations on Tuesday with flooding in the KwaZulu Natal province
affecting logistics, according to those with knowledge of the
matter.
Durban acts as Glencore's main port for exports of cobalt
hydroxide, with the company's mining activity taking place in the
Democratic Republic of the Congo. The company produced 31,300 tons
of cobalt in 2021, and was forecasting output of roughly 48,000
tons in 2022.
Glencore declined to comment to Dow Jones Newswires on the
matter.
Traders of the metal in Europe said prices had not yet reacted
to the news with prices already having pushed to very high levels
following the Ukrainian conflict. "It's creating tightness in an
already tight market but not affecting the metal directly," a
cobalt trader told Dow Jones Newswires in a call.
A different trader indicated that delays of more than two months
between Durban and China have already been seen, meaning the
current flooding issues are likely to add further strain, with
shipments not expected until at least "July and August."
Prices over the last month have been fairly flat, according to
price reporting agency Fastmarkets. In the firm's most recent price
assessment on April 14 prices stood at an average of $33.69 a pound
when being delivered to China including freight costs, while the
month to date average stood at $33.60 a pound.
Downstream demand of cobalt has been under pressure in recent
weeks with China's lockdowns affecting consumption of goods like
electric vehicles. Traders have been speculating whether demand
will bounce back in the region immediately following the lockdowns
or if economic pessimism on inflation worries will dampen consumer
spending.
Write to Yusuf Khan at yusuf.khan@wsj.com
(END) Dow Jones Newswires
April 20, 2022 13:35 ET (17:35 GMT)
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