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The supply and demand pattern of the domestic cobalt industry may usher in a reversal
Release Time :
2016-05-18
The superposition of multiple factors brings opportunities to the cobalt sector: "supply shrinkage" + "demand growth" + "price bottom" triple factor superposition changes the market's future expectations for cobalt products. As the world's largest cobalt refining country and cobalt consuming country, China is significantly affected by it. The related companies mainly include Huayou Cobalt, China Molybdenum Industry, GEM and so on.
The superposition of multiple factors brings opportunities to the cobalt sector: "supply shrinkage" + "demand growth" + "price bottom" triple factor superposition changes the market's future expectations for cobalt products. As the world's largest cobalt refining country and cobalt consuming country, China is significantly affected by it. The related companies mainly include Huayou Cobalt, China Molybdenum Industry, GEM and so on.
The price of cobalt products is at a relative bottom: Since the financial crisis in 2008, the price of cobalt has been falling all the way, from the highest price of 860,000/ton to less than 200,000/ton, although the current price of cobalt products is still at the lowest level in history , but from the perspective of future changes in supply and demand, cobalt products have the possibility of rising prices.
The supply and demand pattern of the cobalt industry is about to reverse: in 2015, the global supply of refined cobalt was about 102,000 tons, while the demand for cobalt was about 92,000 tons, and the supply exceeded demand. But after 16 years, the supply has changed significantly. Cobalt is an associated ore of copper and nickel, and copper prices continue to fall, causing supply to shrink. Among them, Glencore shut down two mines (maintenance for 18 months), resulting in a shrinking of cobalt supply by about 5,000 tons. At the same time, affected by the child labor incident in Africa and the limitation of mining conditions, Congo, which accounts for 50% of the global cobalt supply, will shut down about 10,000 tons of artisanal mines, and the overall conservative estimate will reduce the supply by 15,000 tons. Changes in supply, thereby changing the pattern of supply and demand, is expected to reverse in 2017.
The demand for cobalt continues to grow: cobalt is mainly used in cemented carbide, lithium batteries and other industries. From a global perspective, about 44% of cobalt is used in lithium batteries, while lithium batteries account for 76% of China's cobalt demand. The development of energy vehicles has obviously driven the demand for cobalt. Judging from the data of the past five years, the overall demand for cobalt has maintained an average annual growth of 7.4%. Cobalt is mainly used in 3C batteries and power battery (ternary) positive electrodes in lithium batteries. Driven by the continuous growth of smartphone sales, the 3C battery segment still maintained a growth rate of around 10%. In terms of power batteries for new energy vehicles, although ternary power batteries currently account for a relatively low proportion (27% of power batteries), with the increase in the mileage requirements of passenger vehicles, the proportion of ternary batteries will also increase. It has become one of the main growth points of cobalt demand.
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