Interfax China reported that Gansu Jinchuan Group, China's largest nickel and cobalt producer, cut its price for electrolytic cobalt by CNY 50,000 per tonne to CNY 748,000 per tonne due to abundant stockpiles.

Analysts told Interfax that Chinese cobalt prices will be weak in the near future, but will find support at the CNY 650,000 per tonne level this year on the back of high production costs.

Analyst Mr Zhai Yang from Huayou Cobalt Nickel Materials Co Ltd said "Although China is currently in the hottest cobalt consumption period, cobalt prices will remain weak in the near future mainly because Jinchuan still has a large amount of cobalt stockpiled as it imported too much during the Chinese New Year festival when cobalt prices were rising quickly."

Mr Zhai said China consumed 13,000 tonnes of cobalt last year and its consumption is set to grow approximately 9.8% YoY to 14,274 tonnes in 2008.

Cobalt is used in the production of X-ray tubes and other specialist products, as well as for the manufacture of many alloys, such carbide alloy and various steel alloys.