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China’s strategic reserve organization is expected to buy 3,100 metric tons of cobalt, two people briefed on the matter said, as Beijing builds up stockpiles of the strategic material used in batteries and aerospace.
Five major cobalt suppliers attended meetings held in Beijing this week to discuss prices and volumes of the purchases, the people said.
The people declined to be identified because of the sensitivity of the matter. China’s National Food and Strategic Reserves Administration did not immediately respond to a fax seeking comment.
China holds strategic reserves of several metals, including copper, aluminum, zinc and cobalt, but does not disclose how much it holds. It typically buys when market prices are low.
However with rising geopolitical tensions and conflicts, Beijing is stepping up its purchases of strategic minerals like cobalt, which is also used to make superalloys for military-linked sectors such as aerospace.
Beijing previously sought 5,000 metric tons of cobalt for state stocks in July, according a report by Bloomberg News.
Prices agreed at this week’s meetings were close to market prices, one of the people said.
Cobalt prices in China’s eastern Zhejiang province have rallied this month, touching a near three-month peak earlier this week of 255,000 yuan ($34,852) per ton.
However, that is still only around half the record levels reached in March 2022 and down 27.5% compared with a year earlier due to a supply glut.
It was not clear when the deliveries of cobalt are to be made to the state reserves.
China is the world’s top consumer of cobalt but relies heavily on imports of the metal, mainly from the Democratic Republic of Congo.
($1 = 7.3166 Chinese yuan renminbi)
(By Reuters Newsroom; Editing by Veronica Brown and Jane Merriman, Kirsten Donovan)
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