I. Trend analysis
According to the monitoring data of business associations, since June, the domestic cobalt market has been unable to rise, cobalt price shocks have been adjusted, small shocks have fallen, and the overall cobalt price has not been able to rebound. As of June 17, the cobalt price was 240500.00 yuan/ton, down 0.76% from 242333.33 yuan/ton at the beginning of the month. Compared with the previous period, the cobalt price fell slightly in June, and the cobalt market remained basically stable.
II. Market Analysis
MB quotation in the international market fluctuated and fell in June. The global market of cobalt was cold. The international price of cobalt was unable to rise. The falling international price of cobalt dragged down the domestic market of cobalt.
The cobalt price in LME market fell after June, and the international cobalt market lost its momentum to rise. The global cobalt market was obviously short, while the domestic market was dragged down.
Sales of Smart Wearable Devices Increased
On June 11, IDC consulted and released the Quarterly Tracking Report of China’s Wearable Equipment Market, which said that in the first quarter of 2019, China’s wearable equipment market shipped 19.5 million units, an increase of 34.7% over the same period last year. Basic wearable devices (wearable devices that do not support third-party applications) grew by 25.5% year-on-year, while smart wearable devices grew by 84.6% year-on-year. The sales of intelligent wearable equipment have increased greatly, which is beneficial to the growth of demand in cobalt market.
Sales of New Energy Vehicles
In the afternoon of June 12, the data released by the China Automobile Industry Association showed that in May, the production and sales of new energy vehicles reached 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.
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.
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.
3. Future prospects:
According to Bai Jiaxin, a data analyst for business associations, international cobalt price shocks fell in June, global cobalt market performance was weak, domestic cobalt market was bullish, domestic cobalt market fell slightly, but there was a stable basis, cobalt price fell slightly. The performance of new energy automobiles is sluggish, and there is a big gap for Cobalt City. However, the recovery of mobile phone market and the rapid growth of smart wearable devices make up for the shortage of new energy vehicles, and the demand of cobalt market is growing steadily. Overall, the demand of cobalt market is growing steadily. At present, the global cobalt market is still in a state of oversupply. Cobalt market is not motivated to rise. However, with the issuance of 5G mobile phone licenses in China, 5G renewal has been put on the agenda, and the national consumption upgrading policy is also better for cobalt market. In the future, the price of cobalt is at a low level, and there is little room for the price to fall, but the overall supply of cobalt is in excess of demand, and the driving force of cobalt price rise is insufficient. However, with the implementation of domestic policies, domestic cobalt price rebounds or becomes the lowest point of cobalt price in June, and the turning point of stopping the decline and rebounding.