I. Trend analysis
According to the monitoring data of business associations, the domestic cobalt price rose first and then stabilized in September, and then the market cobalt price tended to stabilize. As of September 29, the price of cobalt was 302666.66 yuan/ton, up 13.64% from the average price of 266333.34 yuan/ton on September 1, and down 0.55% from the price of cobalt on September 24. Recently, the international cobalt price has remained stable, while the domestic cobalt price has weakened.
II. Market Analysis
1. International Cobalt Price Rise Slows down
MB cobalt price stabilization
As can be seen from the table, MB cobalt price rose in September, but the increase was relatively small, and the cobalt price tended to stabilize at the end of September. The international cobalt price is stable, while the domestic cobalt price has weakened. As of September 27, MB standard grade cobalt quoted 17.6-18.1 US dollars per pound, alloy grade cobalt quoted 18-18.5 US dollars per pound; international cobalt price has stabilized, domestic cobalt price has weakened, and overall domestic cobalt market has tended to stabilize.
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Cobalt Price Rising in LME Market
As can be seen from the chart, the price of cobalt in LME market has gradually stabilized after the surge of cobalt price in September. The stability of international cobalt price has weakened the domestic cobalt price advantage, and the domestic cobalt market remains stable.
Sales of new energy vehicles fell 16% year-on-year in August.
According to the data released by the China Automobile Association, in August 2019, the production and sales of new energy vehicles in China completed 87,000 vehicles and 85,000 vehicles respectively, down 12.1% and 15.8% respectively from the same period last year. From January to August, 799,000 new energy vehicles and 793,000 new energy vehicles were produced and sold, up 31.6% and 32.0% respectively from the same period last year. In August, the production and sales of new energy automobiles fell sharply year on year, and the new energy automobile market showed a slump. Although the sluggish performance of the new energy automobile market is considered to be a temporary phenomenon and the future new energy automobile market is still expected, the decline in the production and sales of new energy automobiles has seriously affected the demand of the cobalt market, and the demand of the cobalt market is expected to decline sharply. Overall, the new energy automobile industry has slipped under the support of the cobalt market.
Mobile phone sales continue to decline
According to the data of CITIC, in August 2019, the total shipment of domestic mobile phone market was 308.775 million units, down 5.3% from the same period last year; in January-August 2019, the total shipment of domestic mobile phone market was 251 million units, down 5.5% from the same period last year. Domestic mobile phone sales fell sharply, and demand for cobalt declined significantly. Although the sales of 5G mobile phones have made little progress, in August the sales of 5G mobile phones were only 219,000, and the sales of 5G mobile phones were only 291,000. The rapid development of 5G mobile phones has not yet come. It is anticipated that the trend of 5G switching will indeed come in 2020. The demand for cobalt in the mobile phone market in 2019 is not obvious.
3. Prospects for the Future Market
Bai Jiaxin, a data analyst for business associations, believes that the steady rise of international cobalt price in September has a certain promoting effect on domestic cobalt price, and that domestic cobalt price has a certain driving force, but with the stabilization of international cobalt price, the driving force of cobalt market is weakening; in terms of demand, the sharp decline in sales of new energy vehicles and mobile phones has brought about demand for cobalt market. A little haze, cobalt market demand is weak, cobalt prices are weak. In the future market, cobalt supply is expected to decline in the global cobalt market, cobalt mining enterprise cost constraints, the era of low-cost cobalt is far away, cobalt prices may be weakened; cobalt market demand performance is not good in the near future, but cobalt market demand is still bullish in the future, German new energy automobile sales rose substantially, and the global development of new energy automobile market is promoted. The market of new energy automobiles is bound to grow again and substantially after sales. 5G mobile phones are performing normally at this stage. However, with the 5G infrastructure in place, there will be a wave of change in 2020, and the long-term demand for cobalt will rise. Generally speaking, the cobalt market has limited upward momentum and insufficient downward pressure. The probability of cobalt market rising and falling sharply in the near future is relatively small. Cobalt price is mainly stable by shocks. In the long run, cobalt market still has upward momentum, cobalt price has some room to rise, and cobalt price may rise slowly in the long run.