Cobalt sulfate is the main raw material of ternary precursor and industry concentration continues to increase.

Cobalt sulfate, also known as red alum, has a chemical formula of CoSO₄ and is an inorganic compound. Cobalt sulfate appears as rose red crystalline powder, is easily soluble in methanol and water, slightly soluble in ethanol, and insoluble in ammonia. Cobalt sulfate has excellent properties and can be used to produce tire adhesives, catalysts, feed additives and other products.

The main raw materials of cobalt sulfate are cobalt and sulfuric acid. Affected by factors such as the COVID-19 epidemic and shrinking market demand, my country’s cobalt production has shown a slight downward trend, but it can fully meet the production demand for cobalt sulfate. As an important chemical raw material in my country, the output of sulfuric acid has maintained steady growth. According to statistics from the China Sulfuric Acid Industry Association, my country’s sulfuric acid production will reach 109.37 million tons in 2021, a year-on-year increase of 5.8%. The sufficient supply of raw materials provides guarantee for the development of my country’s cobalt sulfate industry. According to the “2022-2027 Cobalt Sulfate Industry In-depth Market Research and Investment Strategy Suggestions Report released by the Industrial Research Center, in 2021 my country’s cobalt sulfate output reached 61,000 tons, a year-on-year increase of 62.2%.

There are many types of cobalt sulfate preparation processes, which can be divided into cobalt oxide method and metallic cobalt method according to different raw materials. The cobalt oxide method uses cobalt oxide or cobalt trioxide as the main raw material, reacts with sulfuric acid solution, and finally obtains cobalt sulfate through filtration, cooling, crushing, drying and other processes; the metal cobalt method uses metal cobalt plates, sulfuric acid and nitric acid. Mixed acids are used as raw materials, and through processes such as heating, dissolution, concentration, crystallization, and separation, cobalt sulfate is finally produced.

Cobalt sulfate is mainly used to produce ternary precursors, and new energy vehicles are its end market. Benefiting from the increasing prosperity of the new energy automobile industry, my country’s market demand for ternary precursors is increasingly strong. In 2021, my country’s ternary precursor shipments reached 647,000 tons, a year-on-year increase of 91.2%. The main raw materials of the ternary precursor are cobalt sulfate, manganese sulfate and nickel sulfate, of which cobalt sulfate accounts for nearly 35.0% of its production cost. As the development of downstream industries continues to accelerate, the scale of my country’s cobalt sulfate market continues to expand.

In terms of market competition, the main cobalt sulfate manufacturers in my country include Ganzhou Tengyuan Cobalt New Materials Co., Ltd., Shenzhen GEM Co., Ltd., and Zhejiang Huayou Cobalt Co., Ltd. Huayou Cobalt focuses on the production and sales of cobalt hydroxide, cobalt tetraoxide, cobalt sulfate and other products, accounting for nearly 20.0% of my country’s cobalt sulfate market. According to Huayou Cobalt’s annual report, the company’s operating income in 2021 reached 35.32 billion yuan, a year-on-year increase of 66.7%.

Industry analysts said that as the main raw material for ternary precursors, my country’s cobalt sulfate production continues to increase. As market demand is gradually released, The future development prospects of the industry will continue to improve. my country’s cobalt sulfate production technology has matured. With the rapid development of leading enterprises, small and medium-sized enterprises with backward production capacity will be eliminated. The Matthew Effect will become more and more significant, which will increase industry concentration.