I. Trend analysis
According to the monitoring data of business associations, cobalt prices have risen sharply this week and the market of cobalt has risen. As of August 9, the price of cobalt was 265,000.00 yuan/ton, up 14.06% from 2323,333.33 yuan/ton at the beginning of the week, and 45.17% from the same period last year.
|PVA 1799 (PVA BF17)|
II. Market Analysis
Canon announced the closure of Mutanda Cobalt Mine by the end of 2019
Mutanda is a large copper and cobalt mine in Congo. In 2018, Mutanda produced 190,000 tons of copper and 27,300 tons of cobalt, which accounted for 0.9% and 20.8% of the world’s supply, respectively. Mutanda’s cobalt output reached 134,000 tons in the first half of 2019, which was 13.6% year-on-year. Glencore announced the closure of the cobalt mine by the end of 2019, which is expected to last for two years.
International Cobalt Price Rising
From the price trend chart, it can be seen that the cobalt price in LME market rose sharply in August, and the cobalt market is good. The rise of cobalt price in the international market is good for the domestic cobalt market.
The impact of subsidies recession on sales of new energy vehicles exceeded expectations
|PVA 1788 (PVA BP17)|
Data show that BYD’s total sales of new energy vehicles this year are 160,000, up 73.17% year-on-year. Beiqi’s new energy sales totaled 78,000 vehicles this year, an increase of 28% over the same period last year. In July, BYD sold 17,000 vehicles, down 11.8% from a year earlier. Sales of Jianghuai New Energy Vehicles fell 66.5% to 1738 in July from a year earlier. Meanwhile, the China Automobile Industry Association has lowered its sales forecast for new energy vehicles this year, from 1.6 million to about 1.5 million. The performance of new energy vehicles is not as expected. The market of new energy vehicles in the future is weakening. The demand of cobalt market is expected to decline, and the driving force of cobalt market is declining.
The growth period of 5G mobile phone is undetermined
Since July, major manufacturers have released their own 5G mobile phones. We are officially entering the 5G era. Although major mobile phone manufacturers have rushed to release a number of 5G mobile phones, from the judgment of research institutions and analysts, consumers may not be able to use 5G mobile phones this year. Until 2020, 5G is unlikely to be widely used in mobile devices. It is estimated that the sales of 5G mobile phones will reach 65 million by 2020. It will take at least two years for 5G to be truly universal. Gartner expects global smartphone sales to fall by 2.5% in 2019, the biggest decline so far. It is very difficult for 5G products to break out in the short term, and there are still uncertainties about when they will break out and whether sales will meet expectations. Generally speaking, future demand is generally bullish, but when it will rise, it is difficult to determine the extent of the increase, and the future demand of cobalt market is full of uncertainty.
Bai Jiaxin, a data analyst with business associations, believes that the news of the shutdown of Jianeng Cobalt Mine will inevitably lead to a rise in cobalt prices, which are still bullish in the future, but the poor performance of new energy vehicles and the sharp decline in mobile phone sales have a negative impact on future cobalt Market demand. Overall, the negative pressure and positive momentum of cobalt market have been deadlocked for quite a long time. At the same time, because of the serious profit loss of cobalt mining enterprises, the pressure of cobalt price rise is greater. The market is bullish on the future market of new energy vehicles and 5G mobile phones. Although the cobalt price has risen sharply recently, the cobalt price is still in the low price range. The pressure of cobalt price falling is insufficient and the momentum of increase is greater. It is expected that the future cobalt market will rise steadily and slightly in a relatively long period of time.