The rise of cobalt price has exceeded most peoples expectations, and the current futures price has exceeded 300000 yuan / ton. The spot price of electrolytic cobalt is around 290000 yuan / ton. The rise of cobalt price also led to the rise of stock price. In recent years, cobalt industry shares generally rose, including Hanrui cobalt industry, Huayou cobalt industry and Luoyang molybdenum industry rose by more than 17%, 7% and 8% respectively in the week.
Pan Chao, an industry analyst at Jiwei IOT, believes that from the perspective of capital, the supply side is tight, the supply chain is fragile, the increase in cobalt demand is huge, and the strategic reserve is of great significance. These factors will stimulate a new round of cobalt price rise again.
Pan Chao told the economic observer, I think the space for the next cobalt price is around 350000-450000 yuan / ton. In the next few days, the price of cobalt may rise very slowly, which will give the market a false impression of rising to the end. However, as long as the price of cobalt does not fall, the phenomenon of continuously increasing inventory in all aspects of the market will always exist, and it is easy to ignore the expansion speed of precursor and positive electrode capacity.
Pan Chao predicted that if the current market development is normal, the cobalt price will reach 400000 yuan / ton in 2021, and a circular top will be built above 400000 yuan / ton. After the output at the ore end is released again (the production speed is accelerated and the ore production is resumed), the price will start to fall again to around 350000 yuan / ton.
upply and demand
On the reasons for this round of cobalt price rise, Antaike analyst Liu Lei believes that it is mainly driven by the tight supply of raw materials.
The spread of the new crown in Africa has increased the risk of cobalt supply. At present, more than 70% of the worlds Cobalt raw materials come from the Congo (DRC) region. As of July 30, 2020, the number of confirmed cases of new crown disease in DRC has reached 9084.
In terms of transportation, the vast majority of cobalt raw materials are transported out through the port of Durban, South Africa, but at present, more than 500000 people have been confirmed in the new crown of South Africa, and the port was also closed from March 26 to the end of April. Due to the poor port transportation, the cobalt raw materials transported to China have been greatly reduced. As a result, the imported raw materials have been at a relatively low level in May and June. According to the calculation of customs data, the import of cobalt raw materials decreased by more than 70% from May to June.
Pan Chao told the economic observer that due to the rapid recovery of the downstream and the superposition of low domestic stocks, the supply of cobalt suddenly became short. The enterprises that predicted the rise of cobalt price had already prepared their stocks for two or three months in advance. However, most enterprises were still bearish on the cobalt Market and maintained a low inventory for about one month. The market suddenly found that the spot was in short supply and cobalt salt smelters began to be reluctant to sell, This led to a rapid rebound in prices.
In addition, the low inventory of various links in the domestic market is also an important reason for the rise in cobalt prices. Pan Chao said that at the end of April, some cobalt salt processing enterprises found it difficult to purchase. One of the difficulties was that the price of cobalt was too low and everyone didnt want to ship. The other was that there was not much inventory in each link.
From the demand side, Liu Lei believes that the current demand is only in the state of slow recovery, there is no obvious increase in the situation. Therefore, overall, tight supply and slow increase in demand have pushed up the current price of cobalt. In fact, supply and demand are in the stage of game, which depends on who wins. If we say that the raw material side can really dominate, the price may go up. Liu Lei said.
Talk about the impact of this round of cobalt price rise on related companies and market in the industry. Pan Chao believes that this is good for the enterprises with cobalt resources, and the price rises, and the profit margin becomes larger, but it has little impact on domestic smelters. Looking back on history, the profits from price rise are all eaten up by the mining end. When the price rises, the coefficient of intermediate products also rises, and the processing profit left for smelters has little change. In addition, the cost of downstream cathode materials will increase, and the price of ternary materials will rise, which will accelerate the trend of high nickel and low cobalt, which is good for the substitute lithium iron phosphate (cobalt free battery).
The future of cobalt
The epidemic broke the normal track of cobalt price. Industry insiders believe that if there is no epidemic, the price of cobalt will be more healthy, which will recover to more than 300000 yuan / ton this year and 350000 yuan / ton next year.
The first stage of the epidemic caused a sharp drop in demand side, leading to a sharp fall in prices in the first quarter, coupled with the impact of the epidemic, enterprises were short of funds, and there was no surplus funds to reserve inventory. When the demand side recovered, the epidemic broke out again in Africa, which increased the supply side risk and formed a vacuum period of imbalance between supply and demand.
At present, the domestic demand for cobalt has returned to the pre epidemic level. Liu Lei told the economic observer that the demand for 3C products is dominant, and new energy vehicles are a new increment, both of which are very important.
In the field of 3C, 5g replacement may increase domestic demand for cobalt. In the past, 3C batteries dominated by smart phones have always been the largest downstream market for cobalt raw materials. However, Liu Lei believes that 5g can increase the demand for cobalt. In fact, it is a false proposition that if a mobile phone is used well, it will not be replaced with a new one, unless there is a demand for a replacement, which is to replace it one by one and update with the usual mobile phone There is no big difference. It can be said that this new demand can not achieve the growth from quantitative change to qualitative change.
The rapid development of the new energy vehicle industry is the core variable that will affect the cobalt metal market in the future. The demand of new energy vehicles for power batteries will increase the demand for cobalt. Pan Chao believes that the market demand for new energy vehicles will increase significantly in the future.
But the voice of cobalt free in the market is making a lot of noise. Every time, when the price of cobalt rises faster, the voice of cobalt free appears. We are all used to it. In fact, its lithium iron phosphate batteries that can really make an impact, not this so-called cobalt free battery. Liu Lei told the economic observer.
Pan Chao believes that the current mainstream power lithium batteries on the market are lithium iron phosphate and nickel cobalt lithium manganese oxide ternary materials, lithium iron phosphate itself is cobalt free, and it is unnecessary to crown the cobalt free gimmick. Cobalt is a kind of metal with excellent performance, which can stabilize the chemical reaction of lithium battery. In order to save cost and increase energy density, low cobalt nickel is a trend for ternary materials. However, as far as the current technology is concerned, ternary lithium batteries with high nickel and low cobalt are more prone to fire.
The downstream terminal enterprises are shouting no cobalt while controlling the supply of cobalt resources. The game in public opinion makes the capital treat cobalt cautiously, resulting in the current cobalt price being significantly undervalued. Pan Chao said.
However, because of the epidemic, cobalt may also be pushed back into the vision of capital. Pan Chao believes that in response to the epidemic, the quantitative easing monetary policies of the worlds major economies have pushed the prices of non-ferrous metals up all the way. Compared with silver, copper, aluminum and other metals, the price of cobalt is currently the smallest increase, and the price of cobalt is undervalued, which will attract the attention of capital in the future, and the influx of hot money is likely to cause the next trend of cobalt price to become irrational.