Sales of new energy vehicles rose

According to data released by the China Automobile Association, in May, China's production and sales of new energy vehicles completed 713,000 and 717,000 units respectively, with a market share of 30.1%. According to data from the China Passenger Transport Association, in May, the wholesale sales of new energy passenger vehicles in China reached 673,000 units, with a wholesale penetration rate of 33.7% for new energy vehicle manufacturers and a retail penetration rate of 33.3% for new energy vehicles. In May, China exported 92,000 new energy passenger vehicles, accounting for 30.5% of passenger vehicle exports. The world's automobile industry will further develop towards electrification, and new energy vehicles will become the mainstream. The proportion of new energy vehicle sales and the market share of new energy vehicle exports both exceeded 30%. The concentration trend of the new energy vehicle industry was obvious, and the new energy vehicle industry had entered a rapid development zone.

According to data released by the National Bureau of Statistics, the profit of the automotive manufacturing industry increased by 1.02 times in May; Against the backdrop of a year-on-year decrease of 12.6% in profits for industrial enterprises above designated size nationwide, the automotive manufacturing industry had performed so well, thanks to the combined effects of booming production and sales of new energy vehicles, increased investment returns, and other factors. Downstream profits increased, stimulating the rise in raw material prices and increasing the driving force for cobalt prices.

Mobile phone sales rebounded and increased

According to data released by the China Academy of Information and Communications Technology, in May 2023, the domestic market shipped 26.037 million mobile phones, a year-on-year increase of 25.2%. From January to May, the overall domestic market shipped 108 million mobile phones, a year-on-year decrease of 0.7%. Due to the adjustment of epidemic prevention and control policies in January 23, the sales of domestic mobile phones plummeted sharply. In other months, the shipment volume of mobile phones in the same period increased year-on-year, and the trend of mobile phone sales rebounding was obvious.

Supply of cobalt in the market increased

According to data released by the General Administration of Customs of China, the total import volume of cobalt raw materials in China was 11,000 tons in May 2023, an increase of 17% month on month and 55% year on year. From January to May 2023, the total import volume of cobalt raw materials in China was 47,900 tons of metal tons, an increase of 23.5% year-on-year. The import of cobalt raw materials had increased significantly, leading to an increase in the supply of cobalt in the domestic market. With the supply side Glencore, CMOC Group Limited and Indonesia nickel cobalt projects and other new production capacity will be put into operation, it is estimated that the global cobalt supply will be 236000 metal tons in 2023, and the overall cobalt demand will be 223,000 metal tons. The overall market supply will exceed demand, and there is still room for electrolytic cobalt price decline.

Overview and outlook

According to data analysts from SunSirs, the cobalt market is currently in a stage of dual increase in supply and demand. In terms of demand, the production and sales of new energy vehicles are booming, and the policy of reducing and exempting new energy vehicle purchase taxes continues to stimulate the increase in production and sales of new energy vehicles. The sales of 3C and smart electronic products such as mobile phones have rebounded, and the proportion of ternary batteries has increased. The demand for cobalt in the market may exceed expectations; The news of domestic cobalt collection and storage has stimulated the expected positive growth in cobalt market demand. In terms of supply, the unstable situation in the Democratic Republic of Congo has affected the supply of cobalt raw materials, but the increase in Indonesian cobalt production has made up for the risk of cobalt supply shortage. In the past 23 years, the import of cobalt raw materials has increased significantly, and the cobalt market has sufficient supply. Overall, the supply and demand in the cobalt market have increased, but overall, the supply in the cobalt market is greater than demand, and it is difficult to sustain the increase in cobalt prices stimulated by storage news. There is limited room for cobalt prices to rise in the future, and cobalt prices may slow down after 300,000 RMB/ton, making it difficult to hit the 350,000/ton RMB mark.

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