Cobalt prices fell in April
According to the data monitoring of business agency, the cobalt market continued its decline in March in April, and the high cobalt price fell back. As of April 30, the average price of cobalt was 540000 yuan / ton, down 3.03% from 556900 yuan / ton on April 1 at the beginning of the month; Compared with the highest point of 575200 yuan / ton of cobalt price in March, it fell by 6.12%. The supply and demand of the cobalt market were both weak, and the cobalt price continued to fall in March.
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Domestic mobile phone shipments fell
According to canalys’ latest report, in the first quarter of 2022, the smart phone market in Chinese Mainland only shipped 75.6 million units, down 18% year-on-year and 13% month on month. Domestic mobile phone shipments fell sharply month on month, and there was a seasonal correction in the market in the first quarter. In April, the epidemic control was strengthened, the retail business was closed and the logistics transportation was delayed. The mobile phone sales were expected to decline. The decline of mobile phone sales affected the demand of cobalt market. The demand of cobalt market was weak, and the downward pressure on cobalt price increased.
The demand of new energy vehicles for cobalt market is still being supported
According to the data released by China Automobile Association, in March, China’s production and sales of new energy vehicles completed 465000 and 484000 respectively, an increase of 1.1 times year-on-year. According to the data released by the China Federation of passenger cars, the sales volume of new passenger cars increased by 43.5% year-on-year, reaching 1.22 million in June. In the context of the sharp decline in sales in the automotive industry, the sales of new energy vehicles rose against the market, and the cobalt market demand played a supporting role.
According to the latest data of China automotive power battery industry innovation alliance, in terms of output, in March 2022, China’s power battery output totaled 39.2gwh, a year-on-year increase of 247.3% and a month on month increase of 23.3%, of which the output of ternary battery was 15.6gwh, accounting for 39.7% of the total output, a year-on-year increase of 167.3% and a month on month increase of 33.8%. In terms of loading volume, in March 2022, the loading volume of power batteries in China was 21.4gwh, a year-on-year increase of 138.0% and a month on month increase of 56.6%, of which the total loading volume of ternary batteries was 8.2gwh, accounting for 38.3% of the total loading volume, a year-on-year increase of 61.2% and a month on month increase of 40.5%. The output and loading volume of ternary batteries rose sharply month on month. The demand of ternary batteries for cobalt market remained strong, and the rise support of cobalt market remained.
Control the impact of production reduction and shutdown on the supply and demand of cobalt City
From the shutdown of Tesla Shanghai plant on March 28 to the formal resumption of production of Tesla Shanghai plant on April 19, Tesla Shanghai plant has been shut down for more than 20 days. Tesla’s shutdown has seriously affected the demand of cobalt City, and the demand of cobalt city has decreased significantly; The cobalt industry chain related enterprises affected by the control of the epidemic control have controlled the production reduction and shutdown, covering the upstream, middle and downstream enterprises of the cobalt industry chain. The overall supply and demand of the cobalt city are weak. Comparatively speaking, the supply of the cobalt city is relatively stable, the demand decline is obvious, and the pressure of cobalt price decline in April is great.
Cobalt salt prices fell
In mid March, the overall market fluctuated greatly. Most manufacturers stopped mining and waited, and the price of cobalt sulfate began to decline and transmitted to the downstream. The prices of lithium cobaltate and cobalt chloride decreased accordingly. The market confidence of electrolytic cobalt was insufficient, the demand was weak, and the price of electrolytic cobalt fluctuated and fell; In April, the epidemic control was strengthened, the price of cobalt salt was sharply reduced again, and the price of electrolytic cobalt was under great pressure.
Resumption of work and production stimulates the recovery of supply and demand in cobalt City
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In mid April, the curtain of resumption of work and production was gradually opened in Shanghai. On the 18th, Tesla, SAIC and other new energy vehicle manufacturers started the resumption of work and production pressure test, and many auto parts suppliers in Shanghai also began to resume work. With the implementation of the white list of “resumption of work and production”, more new energy vehicle related enterprises have joined the army of resumption of work and production, and the demand of cobalt city has slowly warmed up. However, in the process of resumption of work and production, enterprises still face a series of challenges. The recovery speed of demand is slow or difficult to meet expectations. The recovery speed of demand in cobalt market remains to be seen.
Floods in South Africa affect cobalt supply
According to the independent media website of South Africa, the rainstorm caused hundreds of millions of Rand of infrastructure damage and supply chain chaos, and the economic activity of KwaZulu Natal province stalled. The flood destroyed the main logistics routes. As a precautionary measure and for safety reasons, Transnet, South Africa’s state-owned transport group, subsequently announced the suspension of the operation of the whole Durban terminal. As the main transportation channel of cobalt raw materials, the suspension of Durban wharf has led to poor cobalt transportation and reduced cobalt supply in the city.
Glencore lowered its cobalt production forecast
Glencore group reduced its cobalt production to 45000 tons in 2022, which is expected to be reduced by 6%, due to temporary geological and technical restrictions on Katanga mine in the Democratic Republic of the Congo. Glencore’s cobalt production in the first quarter of 2022 was 9700 tons, up 43% year-on-year. Glencore lowered its cobalt production expectation and the supply expectation of cobalt Market decreased.
Market Overview
Bai Jiaxin, a data analyst of business news agency, believes that in April, affected by the epidemic control, the supply and demand of cobalt city were both weak, but generally speaking, the impact of the decline in demand of cobalt city was greater than the fear of supply shortage of cobalt City, and the shock of cobalt price decreased. In the future, with the continuous promotion of resumption of work and production, the demand of cobalt market is expected to improve. Considering the difficulties encountered in resumption of work and production and the weak performance of mobile phone market, the future demand growth of cobalt market may be difficult to meet the expectation. However, Glencore lowered its cobalt production expectation and the transportation interruption in South Africa, which had a negative impact on the supply of cobalt market. In the future, the supply expectation of cobalt Market decreased, the demand expectation increased, and the rising power of cobalt market was large. However, considering that the supply and demand expectation of cobalt market was weak and the rising space of cobalt price was limited, it was expected that the cobalt price in the future market would rise briefly and then fall slightly.
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