I. Trend analysis
According to the monitoring data of business associations, the domestic cobalt market fell more than once in June, and the overall cobalt price was unable to rebound. As of June 30, the cobalt price was 233166.67 yuan/ton, down 3.78% from 242333.33 yuan/ton at the beginning of the month. Compared with the same period last year, it fell 56.02%.
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II. Market Analysis
International Cobalt Price Falling
The international market MB cobalt price fell sharply in June, the global cobalt market was cold, the international cobalt price rose powerlessly, and the falling international cobalt price dragged down the domestic cobalt market.
The price of cobalt in LME market fluctuated and fell in June. The international cobalt market lost its momentum to rise. The global cobalt market was obviously short, while the domestic market was dragged down.
Cobalt Price Index Approaching Historic Low
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On June 29, the Cobalt Commodity Index was 83.87, unchanged from yesterday, down 64.89% from the cyclical peak of 238.91 points (2018-04-15), and up 20.09% from the lowest point of 69.84 on July 05, 2016. (Note: Period refers to 2011-09-01 to date). Domestic cobalt prices continued to fall, approaching the historical status of cobalt prices, cobalt prices fell in limited space.
Sales of New Energy Vehicles
According to the data released by the China Automobile Industry Association, in May, the production and sales of new energy vehicles totaled 112,000 and 104,000 respectively, up 16.9% and 1.8% respectively from the same period last year. From January to May, the production and sales of new energy vehicles reached 480,000 and 464,000 respectively, up 46.0% and 41.5% respectively from the same period last year. New energy automobile sales increased in May, but the growth rate further slowed down. The overall downward trend of industry production and sales has not been effectively alleviated. The demand of cobalt market is lower than expected, which is bad for cobalt market. Since June 26, the new energy automobile subsidy policy began to be implemented in 2019. Not only will the local government subsidies be cancelled, but also the national subsidy standards will be reduced by more than 50%, and the overall subsidy decline will exceed 50%. The sharp decline in subsidies has created a major negative impact on the cobalt market, and the subsequent cobalt price rise is weak.
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Increased demand for cobalt due to increased sales of mobile phones
According to the data of CITIC, in May 2019, the total shipment of mobile phones in the domestic market increased by 1.2% and 4.8% year on year. From January to May 2019, the total shipment of mobile phones in the domestic market dropped by 4.8% compared with the same period in 18 years. Although the sales of mobile phones in 2019 still declined compared with the same period in 18 years, the steady increase in sales of mobile phones in April and May brought good profits to the market and increased sales of mobile phones. The demand of dynamic cobalt market is favorable to the demand of future cobalt market. However, the growth of mobile phone sales is difficult to compensate for the impact of declining sales of new energy automobile subsidies on the cobalt market. The overall demand of the cobalt market has fallen and the rise is weak.
Lithium Battery Production Rises Steadily
According to the statistics of CIIB, the output of lithium batteries rose steadily in 2019, up 7.2% in May compared with the same period last year. The growth rate declined slightly, and the output of lithium batteries maintained a high growth rate. The output of lithium batteries has a certain supporting effect on the demand of cobalt market. The demand of cobalt market increased steadily and the overall cobalt market is favorable.
policies and regulations
On June 6, the State Development and Reform Commission, the Ministry of Ecological Environment and the Ministry of Commerce jointly issued the Implementation Plan for Promoting the Renewal and Upgrading of Key Consumer Goods and Unobstructed Recycling of Resources (2019-2020) (hereinafter referred to as the “Plan”), which takes the structural reform of the supply side as the main line, and focuses on promoting the upgrading of automobile, household appliances and consumer electronics products from four aspects of “consolidation, enhancement, promotion and smoothness”. Promote the recycling of old products. The introduction of the scheme has obvious advantages for automobile and household appliances industries. It is expected that the demand for cobalt in automobile and household appliances industries will rise in the future, and the demand for cobalt in the future will rise, which will have obvious advantages for cobalt price. However, the impact of policies and regulations has a certain lag, and the cobalt market has insufficient momentum to rise in the short term. But the overall future cobalt market is good.
Future prospects:
Bai Jiaxin, a data analyst at Business Society, believes that June is the first month of the implementation of the new policy of subsidizing new energy vehicles. There is a lot of room for new energy vehicles. The new energy automobile industry is facing a shuffle, which has a significant negative impact on the demand of cobalt market, resulting in a sustained decline in cobalt prices. International cobalt price and domestic cobalt price affect each other, resulting in more and more declines in cobalt price. But in a downward trend, we can see a few bright lights. With the approaching of 5G era, mobile phone sales began to pick up, lithium battery production continued to grow, the basic demand of cobalt market was stable, and the pressure of cobalt price drop was relatively small. The national consumer upgrading policy promoted the upgrading of automotive products, which had a better sales of new energy vehicles, offset a part of the subsidy downhill guide. As a result of the decline in sales, domestic cobalt prices are historically low compared with cobalt prices, and there is limited space for cobalt prices to fall. From the above, we can see that the cobalt price will fall slightly in the near future or still in the short term, but the space for the cobalt price to fall is limited, and the future market rise may increase. With the gradual warming of cobalt Market demand, cobalt prices in the future may usher in a long-term slow rising period. In July, the supply-demand relationship of cobalt market has not changed fundamentally, and there has been no good or bad news in the near future. The fluctuation of cobalt price in the future slows down. It is expected that the fluctuation of cobalt price will remain stable in July.